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In this section we'll give you a rough picture of what a trading system should look like. This should give you an idea of what you should be looking for when you develop your system.

• 5 SMA applied to the close
• 10 SMA applied to the close
• Stochastic (14,3,3)
• RSI (9)

### Entry Rules

Enter long if:

• The 5 SMA crosses above the 10 SMA and both stochastic lines are heading up (do not enter if the stochastic lines are already in the overbought territory)
• RSI is greater than 50
Enter short if:
• The 5 SMA crosses below the 10 SMA and both stochastic lines are heading down AND (do not enter if the stochastic lines are already in oversold territory)
• RSI is less than 50

### Exit Rules

• Exit when the 5 SMA crosses the 10 SMA in the opposite direction of your trade OR if RSI crosses back to 50
• Exit when trade hits stop loss of 100 pips

Okay, let's take a look at some charts and see this baby in action...

Mark Lesson Complete

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"The possession of anything begins in the mind."
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