Definition of the term Trading System
Term
Trading System
Usage
Technichal Analysis, Trading term, Trading Software, Trading Tools
Context
Answers questions: What does the term trading system mean? Define trading system. Explain trading system in one sentence.
Definition of Trading System
A set of rules made up by trading Indicators or Forumlas which tells the trader what market actions to take. Often tested beforehand using Historical Data in what is commonly referred to as back testing.
A trading system is a pre-requisite for automated trading to be possible, but does not implicate that all trading systems must be executed automatically.
A trading system can be made up of just a set of rules defined on paper e.g. “never buy stocks in June” but is usually associated with Technical Analysis and various trading software applications.