Many people who want to start forex trading start by watching how other traders do it. But many traders want to know how to get started with their trading strategy. Coming up with a trading strategy is easy. It’s hard to come up with a business strategy that will make you money and buy you a Porsche.
Start with the right ideas. Creating a trading strategy is easy. You can do this if you know how to use trading software and signals. On the other hand, you shouldn’t think that your first trading strategy will start making you a millionaire. Finding an objective trading edge is difficult.
You will find that making money is more than how you trade. The best and long-term way is to develop your own forex trading strategy. Here are the steps that Forex Robot Nation says you should take to create a forex trading strategy.
Find a market.
If you want to trade in foreign currencies, get a currency quote, so you know what you are buying and selling. Make sure you understand how different forex brokers work. You have to know how to figure out the margin.
If you choose stocks, you need to know what a share means. You should know how different a penny stock is from a blue chip. You must understand each market. But you can’t start learning deeply until you’ve chosen the market you want to work in.
Select the time frame for trading.
Choosing a trading time frame is difficult before you have any trading experience. You may not know whether you are better at swing trading or bullish trading. So, to start, you can think about your situation. When you trade faster time frames, you get feedback faster, which reduces the time it takes to learn.
Even if you use longer timelines, what you learn from intraday price movements will still be useful. If you can’t keep track of the forex market for a long time, start with edge charts. You can learn enough about swing trading with hard work to decide if it is right for you.
Choose a tool to find a trend.
When you see a pin bar, you don’t trade; You trade when the market is high and quickly use the pin bar to initiate your trade. If you identify a gammy bar, you do not barter. You trade if you think the market is going nowhere. Choose a reliable tool to help you gauge market performance.
Define an entry trigger.
Even if the market conditions are good, you still want a round entry trigger because it will help you jump into the market without any doubt or hesitation. Both candlestick patterns and bar patterns can be used as useful signals. When you choose indicators, combinations like stochastics and RSI are the best.
Plan for an exit trigger
You should have a plan for what to do if things go wrong. You cannot win in the foreign exchange market, which makes you think you will lose even more. Therefore, it is important to prevent damage. Also, you should consider what you will do if things don’t go as planned. You will not always win in the forex market. So, you have to know when to take advantage and be able to find them.
Define risk.
When you have entry and exit rules, you should work on limiting risk. Position sizing is the first way to do this. In a trading setup, the amount of funds depends on the size of your position. If you double your bet, the risk will also double. Therefore, pay attention to the size of the position.
Write the rules and regulations of Forex trading.
At this point, your forex trading strategy is straightforward. You can learn the rules by heart. It would be best if you still write down your rules. A trading plan is a good way to make sure you stick to your principles and are consistent. It also keeps track of trading strategies. If you want to clean it, you will find it useful.
Backtesting of trading strategies
Your next step is to backtest the trading method with written rules. When you have a voluntary trade-off, it can be difficult to test in retrospect. You have to keep track of the market trades and price changes by hand.
Once you have a mechanical strategy and coding sequence, you can speed up this step. But watching every trade is a great way to develop your market instincts. This can help you think of ways to improve your trading.
Plan how to improve your plan or procedure.
Your first approach to forex trading will not make you money. And that’s all right. Remember that your method is not a fixed object but a living object. It will get better as I learn more and get better at it. It will be helpful if you intend to get feedback to improve your trading process. Test the strategy in the future and keep an eye on what the market says.
Do not make major changes in the way currencies are traded.
For this last step, remember that your goal is for each trade to give you a positive expected value. Nothing good comes out of every trade. Let the numbers work, and don’t try to force your will on this market.
Result
If you do what is said you will have a good and reliable forex trading method. Even if it’s not the gold standard, you make it by trading long-term and following your own style. If you are lucky, you might be able to buy a Porsche by trading forex.
