Create a Forex trading strategy

Forex trading

Create a Forex trading strategy

After reading, this article on how to create a forex trading strategy you will have a better idea of ​​how these strategies work. You will also learn how to know whether your strategy is working as it should or not

which means you will be more able to liquidate losing deals and maximize your opportunities

You should know that creating your own Forex trading strategy requires a lot of work, but it gives you an opportunity to watch how prices move closely and examine them. Market research and price action in this way will help you improve your analysis, which will allow you to adjust and increase the performance of the strategy as well

Create a Forex trading strategy

The first step to creating any Forex trading strategy is the planning process. All you need to generate plans for your strategy is to study price charts, identify opportunities that were available, and then ask questions about how to take advantage of these opportunities

After doing so, it is possible to move to a more advanced stage – the testing phase of these plans. The testing phase includes adjusting and revising the plan based on the information obtained through its use in trading on a demo account. After your Forex trading strategy makes good profits through many demo deals, you can risk real capital

Enter the deal

It price movements that provide profit potential. Check carefully for some of the big price movements on the price chart, and then ask yourself

What is the reason for this move? Is it a particular model of price action or is it a correction of this movement? Was it a breach or a rebound from a resistance or support level? Was it moving at a specific time of day? Was it because of a press release?

What is the reason for the transaction you will use to enter this process? The reason for the execution of the transaction is a specific situation that allows the identification of entry points in real time

Is there any indicators that can help determine the reason for the transaction, or can any of the technical indicators used to confirm the entry? Will Fibonacci corrections be helpful

Was it possible to use a buy limit order or a sell limit, or if you need to use an immediate execution order, will your order be filled if the time of execution of the transaction is in quick market conditions

Get out of the deal

Now you should look for a way out of this deal produced by the signal entering the deal. This stage is more important than the stage of entering the deal, because the exit will determine the amount of your profit or loss. If binary options traded, your risk and earnings ratio will be constant, so some of the questions listed below will not be applicable. Instead, focus on checkout questions how to choose the right time to end the deal

Has there been any signal before the price action you were trying to reverse occurred? Technical indicators can help in this framework. Has the price action been slow before the reversal? Has the price reached an important support or resistance area or a certain Fibonacci level

Did the criteria used to enter the trading process differ? When did you disagree? This can be an exit point

Can I use a stopover? You may be able to use a profit target when you reach multiples of the risk level based on the risk level principle and the expected return, for example 2: 1, or take profit when you have $ 200 or 20 pips

Risk Management

This section discussed in the end, but more importantly. You can get the best entry and exit points, but in the end, every Forex trading strategy will go through losing trades. If you cannot properly manage risk and capital, those losing trades can eliminate the trading account

Check out the entry and exit points you created. What size of deal can you use at these points? Do you have the capital to participate in this type of transaction

Based on the answers to the above questions, what is the risk of each transaction? Try not to risk more than 5% (preferably 1%) of your capital at any time. If transactions are risky, the strategy is not worth it

Is the profit potential of the deal justified and risk averse? Strategy losses should be less than their profits, if they are not, then you needs to re-evaluate your strategy

The test

The test is the next step. You have a plan now, and you have defined plans for how to enter the deal, exit it and control the risk. Now, check the price charts to find more sign-in signals. How will the strategy perform? If it looks promising, test it in more deals or test it on a demo account. It is best to fund the strategy with real money only when you have a sufficient history of winning trades using this strategy. If the strategy is not performing well, you need to re-evaluate

Consider whether the strategy can implemented in periods or other markets. It also assumed to try to apply the strategy to schemes larger or smaller than those you are currently monitoring. Try to know if your strategy works better at a specific time or day. If there is a bad performance day, or a specific day of the day, do not trade during that period.

 Whether additional adjustments or more stringent or comfortable trading filters can apply to improve strategic performance


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