Consider Your Trading Ideas

Along with reviewing the market types, you should begin to think about what strategy characteristics are designed to take advantage of each market condition. You should also decide what type of market best fits your trading personality and financial situation.

In trending markets, you may attempt to capture and ride the big moves while minimizing your losses during the waiting periods; in choppy markets, you may use support and resistance and make many quick trades to capture profits from small movements in price; in volatile markets, you may try to capitalize on short-lived, significant corrections, making quick trades in and out.

At this point, start looking at the built-in strategies and use them to put together ideas to take advantage of your chosen market type and time frame. You don't have to build the entire strategy at once; for example, you can begin by first looking at entry strategies. Then, once you've hit upon a sound entry, you can begin combining it with different exit strategies.

Keep in mind that you can test and trade strategies that:  

• Both buy and sell short - All default strategies contain an entry or an exit, either short or long. You can write custom strategies that combine the two. The Strategy Performance Report Tabs and Fields breaks your trades down by short and long.
• Enter and exit the market at any point in the bar - You can test trading strategies that enter or exit the market at any price within any bar, not just at the close of the bar.
• Contain multiple entries or exits - With TradeStation, you can create trading strategies that contain dozens of different entries or exits. A single strategy can contain several different entries and exits that contain different criteria for long and short entries and exits.
• Buy or sell multiple times in the same direction - Your trading strategies are not limited to buying long once and exiting, or selling short once and exiting. When you test a strategy, TradeStation calculates each time that the criteria of a strategy are met and will generate alerts notifying you that trades in the same direction should be made. Multiple buys or sells in the same direction that add to your current market position are known as pyramiding. You can also set a limit on the number of times a trading strategy can issue a buy or sell order in the same direction.
• Trade a variable number of contracts or shares per entry or exit symbol - TradeStation enables you to specify the number of shares for each entry and exit. When testing a trading strategy, TradeStation displays numbers that show your net market position following each buy or sell that would have resulted from your strategy. When you trade the strategy, TradeStation also tells you the number of shares of a symbol that should be traded, depending on your criteria.

If you can think of it, you can build it into a strategy. The key is that you can use TradeStation to test your ideas before actually trading them, whatever they may be.