I’ve been reading some things about a trading strategy, and that it’s important to have a set strategy on entering and exiting a trade.
I don’t really have one, and I’ve been making successful trades. Am I just lucky? Or am I using a strategy that I have made up, and don’t even know it?
What exactly defines a trading strategy and where do people come up with some of the strange names?
How do u determine when to enter a trade with no strategy. What makes u buy or sell.
Of course you do! If not, then you’re probably just gambling and relying on luck. Maybe starting off with a framework on what makes you buy/sell a particular currency pair based on fundamentals or technicals could work, then you could specify your exact entry points or exit levels.
Yeah, what are you using to decide to buy / sell? Or is it just gut emotion?
Of course you need a strategy, what defines a strategy is when do you enter a trade or exit a trade, if you dont follow something then it is pure luck!
lots of discretionary traders who do well too in all fairness.
Not having a strategy could be a strategy as well (I read that somewhere and agree with that). Using a strategy and not knowing that you are is also an interesting way to trade, but as long as you are profitable and satisfied with your performance I would say keep at it. Take 1,000 trades and see if you are still comfortable and on track with your goals.
Myself i have a strat for entry and exit but there is a huge middle part that actually influences both entry and exit and there is no strategy for experience except alot of losses and wins.
I think what u said about the middle of trade is dead on and not really talked about. What happens there can be difference between win or loss. IMO
I guess my question is… how do you develop a strategy? Obviously developing your own strategy means changing things here and there and refining it.
So what should I start with? For example, right now I just follow the trend or pattern. if it’s moving down, I sell, if it’s moving up, I buy. Obviously that’s fairly over simplified and there is more things I look at within the candlesticks themselves (such as whether its testing highs or lows, etc…)… I look at what it has been doing for the day and if the chart is all over the place, then I’m like a deer steering at headlights.
That’s where I’m curious about a specific strategy and how you all use them. Do you stick with what you know? or do you have different strategies based on specific situations? For example, a strategy on selling vs. a strategy on buying?
Its hard to describe it but I know most books just call it the “zone”. I call it the “flow” and its not something you can teach. 
The strategy for the most part is essentially the same for buying and selling. The strategy isn’t where the novice finds troubled water to cross. The problem is learning how to what i call “flow” with the market and let the market tell you what to do. I suggest you try out all the indicators and every trading strat you can get a hold of until eventually you mature by being wrong so many times your brains starts to remember what doesn’t work and what actually showed some earning at one point. Then you try and work with the good stuff that you’ve sorted out and keep at it until you get something simple enough to work for you. Then apply that for a bit until your brain learns naturally not to fear or be greedy because you have enough experience to handle your emotions. If you make it there than financial freedom is knocking at your door everyday but you still have to go to work.
I don’t really understand. When you buy or sell, what makes you do it? If you just open your trading platform and chose a pair and chose a side (up/down) then yes it is luck!
No you don’t NEED a trading strategy. You only need a trading strategy IF you want to be [U]successful[/U] as a trader!
What is telling you to enter a trade or not to enter? Emotions, fundementals etc…
To make a system you gotta start at the begining, what type of trader are you? After you determine that, you than can determine your system, if you want quick profit in small amounts, scalper, but can be very riskey as well, etc…
You can make a system a number of ways, but demo account testing is the best way. You can learn from the school here at babypips and take what you learn from there and combine it to your trading personality. There is 1000s of systems you just gotta find or make one you think fits your needs well. Start easy, Use support and resistance for the area to look for a reaction, than combine some indicators in to give you a direction of where you think price will go from there, and finally some kind of indicator for a entry, for me its a 12 26 ema cross on a 30min chart. I know my info here is missing pieces of it, but this is a learning process, we are all here to help and will help the best we can!
Happy trading,
Jason
This is the big difference between a professional retail trader and a total beginner/novice - the phrase “trading system” is actually a huge complex area of study, and not just a simple excel spreadsheet. It really is the place where the leap is huge from getting it and actually “getting it”. I feel the term “trading system” is really overused and with little understanding upon what this key element to trading actually does, and more importantly what it [U]should[/U] actually consist of. The idea of a trading system is thrown around by so many traders - and yet any experienced retail trader can with a high degree of certainty establish just how far down the trading journey the named trader actually is by his lack of explanation and understanding.
KarmaSenge is [I]absolutely [/I]right here. If you don’t have a strategy then you shouldn’t even be trading. If you’re winning right now then all you’re really doing is losing money slower than everyone else who doesn’t have a strategy and that’s only through dumb luck. It won’t last.
Please don’t underestimate the psychological aspects of having a strategy you believe in. Psychology is a [I]hugely [/I]important part of the puzzle. If you develop a strategy, test it thoroughly, analyse the data and after all that, you know it’s effective even when it doesn’t always win (which it won’t) then you’ll have a lot more confidence when trading. You’ll also avoid making hasty decisions because you will know the conditions that will cause you to enter the market before a situation develops and you’ll know if/when you enter, where you’ll place your stops and targets. It’s a much calmer and smoother way to trade.
That calmness and confidence will really matter when you hit a losing streak and trust me, you will hit a losing streak at some point because everyone does. It’s the nature of the beast. One of the key things that separates successful traders from those who fail is how they handle themselves when things turn sour.
If you have confidence in your strategy, you’ll stick to it rather than getting cold feet, panicking, maybe taking bigger risks than you otherwise would or should as you to try and recoup your losses or there’s less chance you’ll think about switching strategies in the hope that you’ll hit upon some idea that will make you feel like a winner again. That’s not a good path to be on.
Your question is a good one and I thank you for pitching it but seriously, [I]stop [/I]trading right now while you still have money to play with. Go find a strategy that fits your trading style, back-test it, forward-test, write a journal, analyse your data and learn from it. That’s the only way you will ever become consistently successful at this.
If that sounds like too much hard work then you should seriously consider taking up another hobby, my friend. For what it’s worth, over 90% of traders feel like all that stuff is too much like hard work so you wouldn’t be alone in thinking that. However, if you ever want to be one of the successful ones (and I’m not talking about becoming a millionaire here but just getting to the point where you can make consistent profits from trading) then you need to get your head around the amount of work you need to put in to make it happen.
It’s up to you but either way, I wish you the best of luck!
Couldn’t have said it better, Rockobot well done!
Just like he said, LEARNING from YOUR data is very key, every win and every loss say something different about each trade, learning from a loss about what you did wrong, can help you as much as learning from a win about what you did right. A trading journal helps a lot with this part.
Couldn’t have said it better, Rockobot well done!
Just like he said, LEARNING from YOUR data is very key, every win and every loss say something different about each trade, learning from a loss about what you did wrong, can help you as much as learning from a win about what you did right. A trading journal helps a lot with this part.
Has the OP even been back to the thread to tell how he enters?