IDEA

First of all you need a trading idea. Trading idea is a certain method of work at Forex, that, as the author supposes, can bring profit. There are dozens of good trading ideas on the Internet. Some of them are formalized and described very good, the others are shown in general terms. The ideas of "scalping", "arbitrage", "trading in the channel", for example, are wide-spread and make together the whole class, each of which has many separate strategies. Each of these classes is a generalized approach to the gain of profit at the financial markets, that is general for all or most of strategies. that make part of it. That is why this class ("scalping", for example) cannot be regarded as a trading idea.

One of the classic example of a good trading idea is "Turtles". Using this example we will review all the stages of building of mechanic trading system (MTS), excluding only a concrete program of realization, as it is a topic for another discussion, and we cannot include it in our course. 

It is no coincidence that we have chosen exactly this example. The case is that in accordance to the most wide-spread version of the history of origins of this strategy, it was created to solve the arguments around the question if a trader needs a special talent, a God's gift or "sixth feeling" ("vision of the market"), to understand the art of trading or it is enough just to obtain a certain set of strict rules and follow them.

The sense is if the idea to gain maximal profit of long-term trends, when they appear. (For note: it is considered that about 35% of time any market is in state of ascendant or descendant trend, and 65% - is in flat). The flat period for "Turtles" strategy is an unprofitable one, however when it forms the trend then all the loss accumulated during flat-period is crossed by one-two transactions and profit appears. The business here is that the strategy "Turtles" supposed strict limit of loss positions at the stage when the loss could not become too big. Thus the unprofitable transactions were small. At the same time if a trend starts to form, then Turtles allows the profit to grow without closing of profitable position, when the size of profit is too small. Thus it is possible to say that Turtles realizes one of basic rules of trading: "Limit the losses and give rise to the profit!"

Before we will start another chapter, it has to be noted, that primarily Turtles was developed for the trading of futures contracts at the exchange market. We will consider it at the Forex exchange market. We will make some simplifications to help to a beginner to understand the most important information without insignificant details that may be considered independent