Building a Trading System: Part 1 - Introduction

This begins a series of posts where I will walk through the process of developing a simple trading system. If you've built trading systems before please bear in mind this will be quite rudimentary. The main reason for the series is two-fold: First, if you are new to trading systems it might be instructional and useful to see some of the steps or important factors in system development.

Second, if you are a Covestor.com subscriber this will provide a tiny bit of insight into the process I have used to develop the systems I use to trade the Covestor model. And while the systems I use are far more sophisticated, with radically different results, the basic steps are the same.

We'll begin with a simple mean reversions system. If you're not familiar with "mean reversion" in trading, don't worry. I'll even explain that. We'll then look out how we design entry points for trades, exits, special filters, optimize and backtest the system. I'll do my very best to explain all these terms as we go along, so even the beginner won't get lost. That being said, I don't promise to keep an expert system developer awake... this will be basic.

Stay tuned for more interesting stuff to come!

Good Trading...