Trading Strategy – Traders can spend thousands of dollars for the best trading strategy. Sure, you can find some in books and courses to save time, but trading can also be a “do it yourself” career. Creating a strategy needs access to charts that reflect the time-frame for trading, an objective mind and a platform to transfer your ideas. These ideas are then brought into a strategy and visually backtested on the charts.
We will go through the process of creating your own strategies, and you’ll be ready to start at any time during any time frame.
Time and Market
This all depends on your trading type – day trader, swing trader or investor? You need to narrow your chart options for a strategy to be created, then pick the time frame you wish to trade in. Will it be in minutes or a monthly time frame? Just be sure it suits your needs. Next up is the market you’ll be trading in. Will it be in stocks, futures, options or forex? Once you are fixed for the time frame and market, decide on the type of trade you want to do.
Creating Testing Strategies
Creating a working strategy makes it much more comfortable to stick to your trading plan as the strategy is from your own efforts. For example, a day trader that decides to look at stocks on a few minutes’ time frame. Their selected stocks are from the list of stocks that are produced by the stock screen for certain criteria. Then they’ll look for opportunities to make money on the few minutes chart chosen.
The rise and falls in a price will be observed to see if anything is triggered by these movements. Indicators such as time, candlestick, volume and other patterns are all evaluated. When it looks like a potential strategy can be found, see if the same thing can happen in other movements of the chart. Could there have been a profit recently? If you’re trading within a 10-minute frame, you should only be looking at 10-minute time frames, but also check some other stocks at a time frame that gas passed, and have the same or similar criteria, to check if it could’ve worked out too.
Here are only a few examples of how you could create your own forex strategies. Want to know more methods how to create the most effective strategy? Visit FBS website as the best forex broker in Asia for strategic planning and strategies that will transform you into a professional trader.
Article By : Dharma