How to build a perfect trading strategy
Without having access to a balanced trading strategy, you are not going to become a successful trader. Those who are relatively new to the investment business often buy expensive trading strategies from the pro-Aussie traders. But do you think they can make a profit by using other people’s trading system? Every trader is different. You need to craft the trading strategy based on your personality. To do so, you must educate yourself properly. Though there are many ways to create a balanced trading system, we are going to highlight the key factors. Read this article carefully since it will help you to create the perfect trading system.
Learn about the indicators
Indicators are great tools when you know the proper way to use them. Most of the naïve traders don’t know the perfect way to use this trade filter tool. They overload the trading chart and make things overly complex. On the contrary, the smart traders at Saxo use one or two indicators as their trade filter tools. They never rely on other complicated materials since it forces them to lose money. If you intend to trade the market in the lower time frame, trade with the leading indicators. On the contrary, if you prefer a position trading strategy, use the lagging indicators.
Learn the use of Fibonacci retracement tools
The Fibonacci retracement tool is a great way to filter the best possible trade setup. You might be new to the trading profession still you need to learn trend trading strategy. Try to use the Fibonacci retracement tools in your trading platform and you will know the endpoint of the retracement. Once you have identified the key retracement point try to execute the trade in this zone. Make sure you rely on the higher time frame data since lower time frame trading is extremely risky.
Learn about support and resistance level
Support and resistance level is the most vital thing in the trading business. If you fail to find the key support and resistance level, you are never going to make a profit in the Forex market. Due to this very reason, you need to focus on the daily time frame. Those who trade the minute time frame, always trade the minor support and resistance level. Minor support and resistance level don’t generate high-quality signals for the traders. You will lose most of the trades.
Use the demo account
Once you complete the above three steps, it’s time for you to demo trade the market. Use the demo trading account so that you can create a perfect trading strategy. Being a novice trader, you will have to lose many trades but this is very normal. Consider the losing trades as your business cost and look for better trading opportunities. Never think you can win big trades without having a perfect trading system. In the demo trading account, you will have to lose many trades. Consider the losing trades as your blessings since you will learn new things from your trading mistakes. Trade the demo account for a few months so that you can craft the perfect trading strategy.
Focus on long term goals
To become a successful trader you must focus on long term goals. If you intend to trade the market like a scalper, you are going to blow up the trading account. Scalping is only for experienced professionals. Develop a position trading strategy and try to set realistic goals. Never think you will win big trades without learning to ride the market trend. You don’t have to risk a big portion of your investment to make a decent profit. Just stick to the basic rules of your trading strategy and trade the market with confidence. Never become addicted to this market because it will ruin your trading career. Be rational and trade the market just like the experienced traders at Saxo.