- December 23, 2019 at 5:13 pm #11104sandysrParticipant
Developing a new strategy from scratch is a simple task for professionals. But those who are new to the Forex trading industry often get lost. They try to use the paid strategy and fail to make a profit. Before you start to develop a new system, you have to think about long term goals. Instead of looking to secure some quick profit, try to develop a systematic approach so that you can predict the currency pair’s movement with a few logics. A strategy is nothing but a bunch of rules which help you to determine the buying or selling point.
So, is it possible to create a new strategy? Can the traders in Singapore develop a perfectly balanced strategy to execute the trades? Read this article and you will know how to craft your first Forex trading strategy.
Trade with a paid strategy
Before you start developing your strategy, you have to trade with paid strategy. However, you can also this by using the free strategy available on the internet. Learn the use of strategy and see how the professionals are making a profit. Once you get the basic idea of the paid strategy, it’s time to develop a unique strategy. For that, you must have extensive knowledge of the technology sectors. The new traders often think they have a perfect understanding of the price movement and candlestick patterns. But in reality, they don’t understand how to place a quality trade and make a profit. To avoid getting kicked from the market, the new investors should use the demo account to develop their unique trading strategy. Once they feel comfortable with the trading strategy, it’s time for them to switch to the real account.
Functions of the trading tools
Analyzing the price chart requires the use of modern tools. The naïve traders often think EAs and bots are the most advanced tools which can help them to make a big profit. But after joining the retail industry, they realize, these are nothing but a filter tool. Look for the trend line and Fibonacci retracement tools in your trading platform. If you use SaxoTraderPro, you can expect to get access to the best quality tools. With those tools, try to find the sweet spot in the chart. Start with the trend trading method. If you want to survive in the Forex market without losing too much money, you better understand how the market trends work. Once you get the idea of the market trend, switch the real account and see how things work.
Development of your risk management policy
Without planning about the risk exposure, you have nothing in your portfolio. You can create the best trading strategy in the world, but still, it will cost you money. You will be losing trades regularly. To limit the losing amount, you have to work hard and create a risk management policy. Instead of developing an aggressive strategy, focus on the conservative method. You should not risk any amount which you can’t afford to lose. Those who are having trouble identifying the risk exposure should limit the risk to 1%. Dealing with such a strategy requires time and patience. So, consider the first six months as your learning period and stop trading with real money.
Backtest the strategy
By now you should have the ability to filter out the good signals in any asset. But this is not giving you the green light to trade the real market. Use the simulation software to backtest your strategy. However, you can also backtest the trading strategy by trading the real price feed. But don’t conclude execution 2-3 trades. At least 30 trades are a requirement to assess the quality of your strategy. If you feel satisfied, you are ready to deal with the real market. If not, revise your strategy and fix the issues for which you having trouble.
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