How to Create Your Own Trading Strategy

Many people believe that markets are random and prefer to trade on impulse, relying solely on instincts. Sometimes it’s really possible to make a big profit in a single deal that is inspired by your intuition. However, this type of success is a matter of probability, there is no guarantee that you can repeat it.
Experienced traders turn to detailed trading strategies. They know that exchange rates, despite having a certain deviation, follow certain standards. So, you need to have a strategic approach to trading: that’s why we recommend that you build your own trading strategy.

Advantages of having a trading strategy

– A strategy is a set of rules. It helps the trader avoid the destructive emotions during trading, but only if he follows the same without any deviation.
– A strategy can be validated with historical data, so you have proof that it can really work. 
– A strategy reduces the time for market analysis. As soon as the strategy provides the signals, the trader can begin to act. 
Trading Tip : You can find various Forex trading strategies on the internet. Before using any of them on your live account, try the demo account. Create realistic expectations: some strategies are better than others, but none will give you 100% profit. 
So, even though there are hundreds of existing strategies ready for use, you can try to build yours. The unquestionable advantage of this case is that it will take into consideration your personal approach to Forex trading.  
You do not have to have several years of experience with trading to create your own strategy. However, you should know of some basic things like:  

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· How and when exchange rates move. For example, you should know that currencies may rise and fall due to meetings and disclosures of important economic data made by central banks.
· Where are the profit opportunities: what type of economic events / technical adjustments will lead to specific moves in the market. 
· How to read Forex charts and use technical indicators.

Steps to Build Your Own Trading Strategy

1. Ask yourself who you are – scalper, day trader, medium-term trader or long-term trader – and choose a time interval: M30, time, daily, weekly, monthly, etc.
2. Decide on which market conditions you will focus on. As you may know, there are three primary conditions: tendency, amplitude, and disruption. Each of these conditions displays its own tone of the market. So a strategy that is good for trending trades can yield weak results when the market is at a breadth.
3. Choose your tools. Will you use technical indicators? If so, which ones? There are two types of strategy: with indicators and without indicators. If you prefer a strategy with indicators, there are several technical indicators available in Metatrader – they will help you to identify the market movement. Strategies without indicators can include analysis of candle patterns, chart patterns, trendlines and other elements of price action, in addition to news trading. 
4. Define the arrangement (the necessary conditions) and the trigger (input rule) of your strategy.
The setup is a favorable market condition, significant but not sufficient to open the negotiation. It can refer to a specific location of the candles or the indicators that you apply to a technical chart. The arrangement shows a favorable time to negotiate, but it does not indicate the exact time for you to enter. 
The arrangement may consist of one or more filters. Filters are made to protect traders from receiving fake commercial signals.However, if you apply too many filters, you’re risking losing those signals altogether. Therefore, a balance between a small number and a large number of filters is required. 
The second important element is the trigger. Unlike the arrangement, it is a technical signal that indicates the right time to enter the market. It is very important to know your specific trigger to enter the market without hesitation. It can be candles, bar standards, gauges and oscillators. 
5. Define rigid parameters for risk management: risk / reward ratio and position size. The most common reason for potential loss and profit is 1: 3. The basic rule of negotiations is to risk no more than 1-2% of the deposit for 1 negotiation.
6. Choose exit rules: Create a rule for Take Profit and Stop Loss orders. 
In addition to the input trigger, there is also the output trigger, which is the time when you understand that it is time to close your trading. The exit trigger is useful not only when you fail but also when you are profiting because the market will be in your favor forever. 
7. Write down the rules of your strategy. Even if you are sure that you remember all the steps of your strategy, it is important to write them down so you do not hesitate to negotiate.
8. Test your strategy on a demo account. Make an effort: this will create the basis for your success. If there are errors, you can fix them without losing money. 
9. Start using your live account strategy: do not deviate from your rules, but keep learning and thinking about how to further improve your strategy.

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