Trading Strategy Development

Let's say you have an idea for a trading strategy, and want to see how it performs.  There are a couple of things to do first, such as writing the logic of the strategy as clearly as possible.  Once you have done that, it is necessary to go deeper into strategy development and refine the processes, decisions, and actions that the strategy performs.

Below is the best summary I have found of trading strategy development, the full article is found here: AutomatedTrader.net

1. Trade selection algorithms
   1. Valuation and forecasting calculations
   2. Optimization routines
   3. Entry characteristics
      1. Signal definition (position rationale)
      2. Quantity
      3. Order type
      4. Entry price
   4. Exit characteristics
      1. Profit targets
      2. Trailing stops
      3. Time till exit
      4. Rebalancing exit
2. Trade execution and trade cost analysis calculations
3. Cash management procedures
4. Risk algorithms
   1. Risk calculations
   2. Hedging algorithms
   3. Drawdown procedures
   4. Cash and borrowing procedures
   5. Credit risk exposures
5. Performance monitoring and reporting
   1. Performance metrics
   2. Simple metric calculations
   3. Shutdown triggers.