How to build a good trading strategy?

Greggy posted:
Firstly I want to apologise to all those who take part in these discussions, especially if I have offended anybody. When I first started posting it was with the pure intention to air my grievances about the market, but also to help some of the newer traders and manual traders with some trading strategies that I have learnt myself. These are all good strategies and used properly can help you to make money e.g. Parabolic Cross, Candlestick/wick Cross and some others.

Since I started posting, instead of looking at some of the strategies, people have been more concerned with my trading performance instead of my technical skills and this is why you will find my demo account paraded on some forums. Last night was the US Election and I was long the US$, feeling that Hilary Clinton would win, but if you have read some of the headlines I was not the only one in the market who was surprised to see her lose. So what was my strategy. I fully expected USDJPY to retrace and EURUSD to retrace during the election. I believed that they would both fill their respective gaps - USDJPY I had as a double bottom or hitting 61.8, but of course it over ran this. I expected EURUSD to be a double top or at least hit 61.8. Then I was hoping that both would rebound and hit new highs and lows respectively had Hilary Clinton won. I was wrong big time!!!!

So I just wanted to post my account and say I am not one of those 'Who only Sings When they're Winning!!!' Luckily it was only a demo and as I have always maintained I will not trade live until I see consistency in my performance.

So once again deeply sorry if I have offended anybody & Good Luck with your Trading!!!

Based on your postings, I have some comments (meant to be constructive) on where you are in your development as a technical trader and areas of further effort

(1)Whilst you talked of some technical setups e.g. Parabolic Cross et al, they are in themselves merely potential trade opportunities as a trade setup rather than trade strategies. You are at a stage in your development where you are unable to differentiate the difference. This is evident where you continue to trade on feelings and hope rather than on technical. Many traders can spent a long time in this wilderness. There are many reasons but primarily a trade strategy requires the marrying together of many parts and entry setups are simply a sliver of the complete strategy. The important thing you need to do is not trade on feelings but on the technical set up, whatever that may be for you.
(2)Your path to consistency begins when you are able to with discipline follow your trade plan and not on feelings. It requires behaviour modification and is not as simple as deciding to do so. You cannot improve your trading performance until you are able to monitor your performance and that requires some form of technical standard that you apply and to benchmark performance against. Unfortunately feelings is not exactly quantifiable to address shortcomings.
(3)Trading involves TA and actual trading. This means left hand chart analysis and a trading process that you follow. TA itself is not trading and you are confusing the two. You are spending two much time on the former without actually understanding what is involved in the latter.
(4)Trading is not just about methodology but psychology. Demo accounts do not address the latter characteristics. You need to get out of this big account equity and big lots in demo and actually use a level of equity and position size that you will likely adopt when you go live. You need to replicate identical environment. That will help in transitioning to the real world. You need to understand position sizing do have a significant impact on trade performance and risk of ruin. Going about it ignorantly will not help to set up correctly for future success.

If I were to sum up your situation, a little knowledge is a dangerous thing. You basically do not know what you do not know. Having said that all of us has been through this path and requires time, and expenditure of effort in the right areas.

Greggy posted:
Firstly I want to apologise to all those who take part in these discussions, especially if I have offended anybody.

no need to apology, just be yourself and follow your guts in trading, good luck! 😄

Building a good trading strategy requires experience, skill and due knowledge of forex fundamentals. However, for that one need to invest time practicing, understanding various technical indicators, seeing the performance of different EA’s and then building your own strategy as per your interest, trading style and schedule. Learning from our own mistakes can best help us to build a great strategy.

Benefits of building a good trading strategy:

1. Strategy which is based on set proven rules. It helps to bring prove results and also removes the human emotions from decision making.

2. Strategies which can be back tested based on history to see if they are worth before actually investing real money.

3. Strategy based back testing also helps in verification for associated cost so that the trader can check potential profits realistically. This hypothetical profit may look attractive but a brokerage commission may change the equation.

4. Strategy can be an automated one to send alerts, gives pop-up and for charting tools. This can also reduce the requirement for manual monitoring & taking action. With a required model, a trader easily tracks instruments. Thus, such automation manually tracks even one on any instrument which is difficult to predict.

prakash104 posted:
My forex trading success is due to two things.

1st - trading method
2nd - self discipline

               A professional forex trader will use a simple forex trading method.It won't be a complex method.Many losing forex traders don't have any good strategy to trade forex. They may be using multiple techniques and different time frames.The key to success in forex trading is you must have a well defined simple trading strategy.

                     If you are using multiple techniques, then take a resolution from here onwards not to use them.Use only one or two techniques.Never change your strategy and time frame because there is no holy grail in forex trading.All strategies will fail at any time.

Do you think it is the best strategy for everything in general, both in manual and robotic trading?🙄

To build a good trading strategy i simply follow some basic rules. Which are-
Grow your knowledge about forex
At first give time to learn not to trade
Make your skill
Take a mental preparation
Control your emotion
Set goals & observe the market at first
Don’t get biased with the screen
Take a shoot and be patient. You will see the result. Follow the simple rules & stay with that.

jameshallow07 posted:
Benefits of building a good trading strategy:

1. Strategy which is based on set proven rules. It helps to bring prove results and also removes the human emotions from decision making.

2. Strategies which can be back tested based on history to see if they are worth before actually investing real money.

3. Strategy based back testing also helps in verification for associated cost so that the trader can check potential profits realistically. This hypothetical profit may look attractive but a brokerage commission may change the equation.

4. Strategy can be an automated one to send alerts, gives pop-up and for charting tools. This can also reduce the requirement for manual monitoring & taking action. With a required model, a trader easily tracks instruments. Thus, such automation manually tracks even one on any instrument which is difficult to predict.

True that!
A good forex strategy if followed properly can help you survive and progress in the forex market and introduce consistency in your trading. A well build trading strategy can help you access the current market opportunities and monitor your trades easily. Building a good strategy demands requires set of skills and lot of discipline.

Very true about the discipline to follow the strategy consistently. I think it's important to accept that the price can have ups and downs but it is how you define your entry and exit levels that can make the difference.

Hero76 posted:
Good strategy is experience mixed with smart brains and still nerves. Observation and attention to detail and to the indicators. Fundamental analysis, news analysis, knowledge of each other and its collaboration - that’s the way it works. Or go make some scalping 😁

Of course The Forex currency market allows great opportunities for individual traders to earn stable profits by developing strategies that really work.

There is a big difference between successful Forex strategies and those that are not. The strategies that really serve to earn money consistently in the Forex market, focus on analyzing market data, rather than follow secondary indicators or commercial software programs.

It is obvious that the difficulty of finding a good Forex strategy is based on the analysis of market data.

Therefore the fundamental or macroeconomic analysis consists of the study of the macroeconomic causes that affect the supply and demand of foreign exchange in the forex market. The fundamental analysis focuses on the macroeconomic situation of a given country, as well as on the world economic situation or a group of particular States and their respective relations.
 
  In the same way we must keep in mind that the market operates as a whole, and as a rule the changes produced in the economy end up having repercussions sooner or later on the supply and demand of both currencies.

Resilience .....

It is a very important skill and is the one that you will have to handle a lot at the moment of starting to operate since to date I do not know anyone who has not stumbled upon their first account and even with several accounts until they can succeed.

It is very important not to confuse this ability with 'to follow as it is' since many times happens that to continue as it is they start to risk assets that you can not allow to lose.

I think every Forex trader has their own strategy. Some use well-established strategies, some design their own strategy from scratch and others use a combination of strategies.

Some strategies are based on indicators such as moving averages, RSI, etc. Indicators have parameters, such as the number of time periods that a moving average will take into account. In these cases, the backtesting process will be able to evaluate several combinations of parameters and choose the ones that had the best performance in the past. However, that a strategy has had an excellent performance in the past, does not mean that it will automatically continue to be successful in the future.

km113 posted:
I believe that developing a response management plan is absolutely critical to the success of a creative plan to develop a response management plan. Consumers can respond in various ways to any message, and it is imperative to ensure that those responses can be captured and measured appropriately.

Completely agree with you. Having a plan is a success so you will have had an excellent performance.

You may have a great strategy, good technical analysis skills or an exceptional intuition, but finally not if you choose a good broker, the above will not do any good. A good Forex broker is one who will not only care about your money, will make the actual trade with your positions, supports your preferred deposit / withdrawal methods and has a quick and helpful user support service. It is good if a broker is registered with some type of government financial commission.

Yes, and also you need to know when and how to use this strategy, otherwise it won’t work in your favor

Although it is faster and easier to perform a technical analysis, the ideal is to combine both strategies, since an unexpected event can change the trend, and technical analysis can explain movements that the fundamental can not, such as a Radical change in the quotation.

Having a good trading strategy, you should not go from one strategy to another, you should spend more time to perfect your skills with one strategy until you become profitable before trying to learn another.
Do not become a strategy junkie who spends a lot of time learning different strategies. This will not make you a profitable trader as you do not have the ability to trade with any specific strategy.

Back testing is a good way to build a good trading strategy. Observe the chart to learn the pattern of candlestick of a pair. Every pair has its own characteristics. Then use indicator if you are exoert at those indicator. Tesr the method over few months. It is important to test it. I am a binary options trader. If you are interested in options trading, go to lxmarkets and open an account with the broker.