Every trader needs a proper Forex trading plan. We go one step closer to perfection and present you a Guide to creating your own Forex trading strategy!
I believe that one of the key elements of success achievement is the ability of a person to organize and maintain things. Thus, in order to reach the desired goal, you will need a precise and detailed plan. The same applies to the Forex trading. I would even say that in Forex – order and management are crucial for your success.
Guide to creating your own Forex trading strategy
The most successful people on the planet, do not only have a business plan but also a life plan on a daily basis. For example, one of the famous self-made millionaires, Tucker Hughes, has his day planned to the smallest details. He says:
Mr. Hughes is only 22 years old and his key to success is the order in everything. He says that he knows what he will wear in a week, and this gives him freedom to concentrate on more valuable things.
However, this is already a talk for another article. Today, we will talk about your own Forex trading strategy. The point below are not precise and strict rules, you can see them as a Guide to creating your own Forex trading strategy.
So, where do we begin?
Advantages of Creating your own Forex trading strategy
+ Finding a Forex trading strategy might be challenging. There are so many Forex strategies on the web, yet not all of them as equal and not all of them will suit you. Nevertheless, you can find the strategy that will fit your needs and lifestyle.
+ Yet, I believe it is always better to have YOUR OWN Forex trading strategy that will exactly mirror your Trading personality. One more amazing advantage of having your own trading plan is that it is customized as per your work-life balance and habits. Thus, you will find yourself happy with how well your time and power and optimized around your needs.
+ Another great advantage of creating your own Forex trading strategy is the ability to develop a greater knowledge of the market and the movements in it. Also, when one creates their own Forex trading plan, they are actually becoming masters of this strategy. This provides a trader with huge benefit, as he/she knows what can cause the plan not to work and will be ready to make changes when needed.
How to Create a Forex Strategy?
Even though this might take some time, it also can be fun for a trader. For example, you will need to test the ideas you came up with. But how to generate one?
One of the ways to inspire yourself for the creation of the Forex strategy is watching the charts. Specifically, watch how the charts move at times, when you can make money. The choice of the time-frame is all yours.
Once you find a move that you think is profitable, ask yourself the following questions:
- What has triggered the move?
- Where and how could I exit?
- Forex money management
- Additional things to consider
Also, ask any other specific question that you would like to include in this analysis.
Summing up the analysis part, you would want to make sure you analyze your charts for opportunities. You will need to further examine these opportunities. Furthermore, then you need to think how can you turn these opportunities into real life without risking too much.
Once you have analyzed a number of such opportunities, you can be one step closer to creating your own Forex trading strategy. While analyzing the opportunities, you might notice a pattern or some specific behavior. This would lead you to come up with an idea, or hypothesis.
Next step of Guide to creating your own Forex trading strategy – every hypothesis needs a test.
In this part, you will need to check if your hypothesis works on the recent movements. You can look for this at trade signals. You will need to check the profitability by summing up the wins and losses and calculating a net result.
Afterward, test if the Forex strategy works on upcoming movements. In case, it does work successfully, then try and utilize it in the real time on demo data. In case you generate profits in your demo account by using ONLY this strategy for at least two –three months, you can actually consider using it with real funds.
Do you think you can anything to this Guide to creating your own Forex trading strategy? Or maybe you think we missed something? Let us know in the comments section below.