I saw that a certain strategy doesn’t work well for a long time. In this case, what do you do? Do you change your strategy at times or you have other tactics?
No. I just don’t trade during my strategy has a chance of failing. This is the best that you can do.
In case you have the urge to trade for some reason, make sure to book profit earlier.
I just assumed that you’re strategy doesn’t work in a ranging market as most people trading trend pull backs or breakouts.
do you trade via only one strategy?
But there is a problem that sometimes you may need o stay away from trading for a very long time.
Until now, I am following only one strategy but don’t know what I will do in future.
Hence, why I said this. And I also don’t what kind of strategy that you are using, what type of trader you are etc.
But there’s one thing I’m sure, doesn’t matter what kind of strategy that you’re using, if the larger player is not interested yet in that particular product that you are trading, or if they’re not around when you’re trading it. That strategy will fail. Trading is not about which indicator is the best. It’s about tracking what the larger player is doing, which product they are interested in. Ride their moves. Do it well enough and get paid.
If your strategy isnt working it could mean its not suited for you or you need to take a break from trading. Its best to analyze where you went wrong with the trade so you can figure out what to do if presented with the same scenario in the future. A good trade strategy will fail if you dont follow your own rules.
We always recommend this to our subscribers: have 3 working strategies, trade one, next trade the other and thirdly trade the other. If you get stopped out on one strategy, and if your strategies have a high success rate, you’ll probably make the it up on the next trade. Its always normal to lose a few but you have to manage the losses and make sure the wins are more.
Personally, I believe in being adaptable. There are times when it’s wise to step back from trading, especially if a strategy isn’t performing well. Recognize when the market conditions aren’t favorable and take a break
As this strategy is trend-specific, I don’t trade when the market is out of trend.
If you find your strategies failling consistently, then will you leave trading? No break will work if your strategy isn’t up the mark.
Appriate your opinion! It’s really effective.
Performance of highly prescriptive TA-based strategies decays over time on any given single market. This is the sort of strategy that uses 2 or 3 MA’s for set-up, confirmed by an off-chart indicator, 1 or 2 lower time-frame for price action-based entry opportunities and another off-chart indicator to confirm entry point.
Meanwhile the same strategy is simultaneously improving on another market. There will be nothing on either chart to show why the same strategy should be failing an one and succeeding on the other. Nobody knows why this happens. The time periods for performance and failure are multiple months, maybe years. As there are 28 leading forex pairs, any strategy of this type is working very well on at least one of those markets at any given point in time.
But the underlying principles of strategies do not change. Trend-following has a high win rate and low r:r. Reversal and break-out trading have have a low win rate and a high r:r. These characteristics are always present.
As I trade forex for years, I got to know that all of the trading strategies are using almost the same principles.
So I think we can use a strategy forever while maintaining money management rules tight.
However, my question is can’t a trend following strategy have a high rr ratio and low winning ratio?
Yes. You can seriously improve your r:r by pyramiding winning positions. This increases the proportion of break-even trades in your record so your win rate might drop. The returns on each trade rapidly become ridiculous but the probability of this happening on a forex pair is limited.
I’m unclear what people mean when they say ¨at different times¨.
Does that mean a ranging trend vs swinging trend? If that’s the case, then I understand what that means.
But if a strategy performs well for a week, or a month, then becomes a losing strategy, perhaps the strategy was never any good, or the trader changed something.
That’s the whole point of backtesting isn’t it? If you randomly backtest your strategy in different conditions in 2022, 2019, and 2013…what could possibly come up in 2023 that you didn’t come across during the last 10 years?
Again, if we’re talking about a sideways market vs trending, then that makes sense to me. But otherwise, I don’t get it.
Fair point. Reminds of the old story that went round a few years back - a noted successful London fund manager retired and pretty soon declared that his strategy had consisted of counting the red and the green traffic lights on his way to the office. If there were more green than red he told his team to buy: if there were more red than green, he told them to sell. Nobody knows if he was kidding…
The average traffic light is on red longer than it’s on green.
Therefore the average journey encounters more red lights than green.
Therefore, overall, this is a short-biased strategy.
Therefore, if it included indices, I doubt it.
lol, is this a factual statement, or just a guess you thought nobody would challenge because it sounds “probably right”?
i would think, on a long journey to work along a main road, in a city, where the traffic lights are mostly at the junctions with much smaller side-streets (as one sometimes sees), especially with rush-hour light-timing, they could easily be on green a lot more than on red?
but i’m notoriously argumentative, of course …
When my strategy seems to not be working, I take a step back and I do not trade for a while.