Converting an idea in to trading method or system requires putting all elements of trading mix together. Trading Mix is like the Lego Blocks of trading. They are under your control and once you have the basic framework , you can convert any trading concept in to workable method.
Vehicle selection (equity selection in stock market case)
By putting together the different elements of the trading mix we can overall create a composite trading system. we can test individual element or we can then test the overall mix of elements. I have written about this in my previous post.
In marketing there is a concept called marketing mix. The central hypothesis is that you can not control the consumer behaviour but what you can control is the marketing mix.
So given an idea like say the IBD scans, the next task is to assemble a complete working trading method. Or given a concept like earnings breakout , the next task is to put together a working system. This involves a step by step approach and once you master that you can put together several systems. Many time members or traders share a concept with me and all I do is put together a working system by using inter changeable parts like entries, exits, entry set ups, exit set ups etc. Think of these as lego blocks. Your task is to assemble them together.
The basic framework for putting a method together is (more.....)