This will appear a real newbie question but if possible i would like a bit of clarity.
All traders talk about their own specific [U]strategies[/U]
What i would simply like to understand is what components are needed for an actual strategie
I appear to not have a strategie, i base my trades on technical/fundamental analysis and suitable risk/reward ratio, is this what is meant by a strategie?
Surely everyone who trades does this
what makes different peoples stratergies different - i know this could be a huge answer but if someone could help me with understanding what components needs to be included or point me in the direction of a known strategie that is writen somewhere on the net that i could have a look at
Again Many thanks
Stu
Greetings Stu,
For most traders, a strategy is based on their knowledge or beliefs in the market. Since we all have different views and beliefs on the market, every traders’ strategy will be different.
For instance, a popular view is that “some pairs strongly trend intraday.” How would one approach that? Well, one thought would be, “I would like to get in early on a trend change and ride it.” Great, now that we have an objective, how do we accomplish it… Based on what we know about Moving Averages, this thought process could be the basis for a Moving Average Cross over system.
See how a view can be developed into a very basic strategy? Of course, when we throw in our knowledge and views of money management, market psychology, etc… Our strategies become much more complex and can easily differ from one trader to another.
Now what if you know nothing about the market? Well, that’s when you learn and observe. Try out different indicators, watch market reaction to news events, etc. Or you can go down the route of checking out other systems and asking “why whoever designed the system used this indicator or that indicator?” You can then pick it apart and use whatever works for you.
The key to trading is finding your niche and use what works best for you. If you don’t understand it and how it works, how can you trade it? right?
I hope this helps Stu. Good luck and good trading!
Thanks pipcrawler thats just the direction i was looking for in begining to form my own
You’re welcome… I wish you the best 