There are millions of strategies out there every one of them can work under certain market conditions and may not work under different conditions.
So the trader who wants to make money in this market has a monstrous range of strategies and trading ideas to use in the market.
Today I am going to give you some ideas on how to make a strategy.
1)First of all a strategy needs a base in which it is going to be based upon. The base can be anything
It can be a certain pattern. A lot of patterns exist on the market some more effective than others. Other patterns are reversal patterns and other patterns are continuation patterns. An example of a reversal pattern is the doji or the 123 pattern.
But you may want to enter the market based on random walk theory, fibonacci, trend following, price action, signals from an indicator or a series of indicators.
You can also straddle the news or trade longer term using fundamentals, technicals or a mix of both market approaches.
2) You need an exit strategy.
Entering the market can be the easiest thing ever. But what about getting the money out of the market? That can be a lot more difficult.
You can get in the market aiming at a certain number of pips. Example: You get in a certain point and take your profit 20 pips later.
You can get your profit at certain support or resistance points, pivot points etc.
You can watch the market and the price action or the chart and some indicators to find the top of the move.
You can enter a rolling stop loss
If you are trading long term you can watch a mix of fundamental and technical info to find an exit point.
Risk/ money management
maybe the most important thing. How much are you going to risk in every trade You can risk the 1% of your account up to 100% of your account in every trade which is strongly not recommended.
How much are you going to risk? You can risk 5 pips to make 10 or 10 pips to make 5 or 10 pips to make 30 and 30 to make 10. That is your risk management. It is very important cause it can be what makes a trading system lucrative. If for example you risk 50 pips to make 100 you can handle nicely a losing streak and then with one or 2 trades you can make your account much bigger than when you had your series of losing trades.
There are many ways to handle risk and manage your money and these are the most important aspects of the game. A lot of newbie accounts were blown up because of lack of knowledge on money management. You should really search the various methods on money and risk management over the web to enhance your trading strategy.
So the trader who wants to make money in this market has a monstrous range of strategies and trading ideas to use in the market.
Today I am going to give you some ideas on how to make a strategy.
1)First of all a strategy needs a base in which it is going to be based upon. The base can be anything
It can be a certain pattern. A lot of patterns exist on the market some more effective than others. Other patterns are reversal patterns and other patterns are continuation patterns. An example of a reversal pattern is the doji or the 123 pattern.
But you may want to enter the market based on random walk theory, fibonacci, trend following, price action, signals from an indicator or a series of indicators.
You can also straddle the news or trade longer term using fundamentals, technicals or a mix of both market approaches.
2) You need an exit strategy.
Entering the market can be the easiest thing ever. But what about getting the money out of the market? That can be a lot more difficult.
You can get in the market aiming at a certain number of pips. Example: You get in a certain point and take your profit 20 pips later.
You can get your profit at certain support or resistance points, pivot points etc.
You can watch the market and the price action or the chart and some indicators to find the top of the move.
You can enter a rolling stop loss
If you are trading long term you can watch a mix of fundamental and technical info to find an exit point.
Risk/ money management
maybe the most important thing. How much are you going to risk in every trade You can risk the 1% of your account up to 100% of your account in every trade which is strongly not recommended.
How much are you going to risk? You can risk 5 pips to make 10 or 10 pips to make 5 or 10 pips to make 30 and 30 to make 10. That is your risk management. It is very important cause it can be what makes a trading system lucrative. If for example you risk 50 pips to make 100 you can handle nicely a losing streak and then with one or 2 trades you can make your account much bigger than when you had your series of losing trades.
There are many ways to handle risk and manage your money and these are the most important aspects of the game. A lot of newbie accounts were blown up because of lack of knowledge on money management. You should really search the various methods on money and risk management over the web to enhance your trading strategy.