Decide Which Strategy To Use!

Discussion in 'General Trading Discussion' started by TraderAnalyst, Sep 10, 2019.

  1. TraderAnalyst

    TraderAnalyst Senior Investor

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    . Among so many useful trading strategies you can feel confused to decide which strategy is better for you at Forex. The answer to this question depends on your trading skills, knowledge, expectation, capacities to endure risks, ability to invest and yes of course on your trading experience.
     
  2. longtermbull

    longtermbull Administrator Staff Member

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    I agree - you need to find a system which works for you and stick with it. The key to any kind of trading is to stick to the script - especially where stop loss limits are concerned!
     
  3. J_C_Anderson

    J_C_Anderson Senior Investor

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    It could be difficult enough to chose the stragety to use because it depends on numerous factors.

    First of all, trader should evaluate his financial capabilities, access to the market available and pshychological features to choose the suitable trading style. Some traders prefer scalping or daytrading because these trading styles provide best utilization of funds available and the best profit potential. In this case trader should be able to make decisions quickly and deal with uncertainty and volatiliy. Other traders prefer swing/mid-term trading as a trading style that allows them to reduce the time spent on trading (actually, swing traders need less time on trading itself, but much more time on analysis).

    Then the trader should choose a particular strategy to use. There are two main ways to deal with this issue:
    - to find a strategy within the Internet,
    - to create your own strategy.
    To my mind, the second approach is much better. In this case, you have better control over your risk. It could be quite complicated to create a strategy, but there are special tools that help traders to perform this. For example, it would be very useful to backtest strategies using dedicated software like Forex Tester that allows trader to check the performance of the strategy in long term perspective. The main idea of backtesting is in using historical data provided by brokers to execute simulated trades strictly in accordance with the rules set forth by the strategy. As the result, trader would get a detailed information on all advantages and disadvantages of the strategy, that is necessary to be able to improve it.

    As the next step, trader should test his strategy on demo to ensure it is profitable and also to check whether it is comfortable for him to trade using it - it is very important too.
     

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