Any beginning trader starts searching for trading strategies, that would make him a billionaire after learning the basics of trading and facing first troubles. The desire itself is a good one and there is nothing wrong with not being too original in trading. However this is where a trader might encounter standard traps, that is why it is worth noting a couple of important details in looking for “your own” strategy.
First of all, forget about buying someone else’s system. You will be able to evaluate usefulness of a system only after trading with it for some time. Quite often the systems that are sold do not have a good quality. Since nobody is willing to part with a profitable source even for a reward. And even a good profitable strategy might be of no use for another trader.
For developing his own good strategy a beginning trader might start with working out free simple forex strategies that are available from special literature and traders’ blogs. We recommend to start building trading system after learning the easiest classical trading strategies: sliding middle, breakdown diapason strategies, graphic trading strategies, canal trading strategies, wave strategies. There is a good deal of information on these topics at specialized resources and forums.
A trader walks into a trap of choice when choosing a specific direction of a trading strategy. With many profitable strategies a trader must choose the most suitable strategy for his temperament. It is important in terms of comfortable trading, style and trading rhythm as well as perception of trading results. There is no other possibility except for trying to trade specific strategies. Get ready to try, to get losses, and consequently one should keep trading on a training account, the amount of which will not be a problem for you in terms of finances, until obtaining a final working strategy.
In order to facilitate the problem of choosing a strategy, one may pick for personal testing only those strategies and logics and algorithm of which you fully understand. One should not be surprised if the strategy seems too easy. Apart from the fact that simple strategies are effective, they are easy to carry out, which reduces the possibility of committing a mistake by a trader. Unfortunately people do not trust simple solutions they tend to choose a complicated algorithm, because it seems right to them. It is wrong but the understanding of it comes only after correcting your own mistakes.
After choosing a couple of strategies one should trade with them and follow “classic” (as in the primary source) parameters and recommendations. You should trade only daily Forex strategies, since interdaily trading requires a continuous observation of the market, something which a beginning trader can’t possibly have.
Analyze the results of trading strategy work, the strategies and not the whole trading. It is important to divide the strategy transactions and non-strategy transactions that a beginning trader makes with certain frequency.
If a strategy seems attractive to you after a detailed analysis, then you should continue testing it with gradual optimizations of the parameters and strategy rules for your own needs. Simultaneously you should test another strategy on another account. Analyze and compare the results of trade on both strategies. Compare how the strategies behave themselves at different periods of time, when they behave better. Thus you will have 2-4 strategies that will behave in different ways under different conditions on the market. For example, one breakdown strategy the strategy of work in diapason, the strategy of news factors. Having different strategies you may increase the effectiveness of your trading.
Choosing a profitable strategy- is a tough, long way of testing and approbation of strategies. But without zeal it is hard to get a simple trading strategy. Source: DewinforexSocial button for Joomla