Creating a perfect trading strategy from scratch is a very challenging task. The majority of the retail traders don’t know the proper way to create their unique trading strategy. They simply follow other people trading system and lose money. Even if you buy the most expensive trading strategy in the world, there is no guarantee you will be able to make a profit. Every trader if different in the Forex market. Trading strategies greatly depend on a trader’s mentality. For instance, those who love to make a quick profit from this market will definitely follow a scalping system. If you handover a position trading system, they will never like it. In fact, they are most likely to lose money.
Now we are going to discuss the key steps a new trader should follow to create a unique trading system. Things might be a little bit challenging at the initial stage but if you follow the guidelines, it won’t take much time for you to become a profitable trader.
Know your personality
You need to know your personality traits. If you feel comfortable with short term trading strategy, you should probably go for the scalping method. On the contrary, if you prefer to trade in a conservative way, it’s better to become a long term trader. Though the experienced traders in the United Kingdom suggest the new traders to become a position trader, still you should rely on the personality trait. Once you know your preferred trading method, open a demo account with Saxo and try practicing hard to create a simple trading strategy.
Know your risk tolerance level
Before you start to become an active trader in the exchange traded funds industry, you need to know your risk tolerance level. Your trading strategy greatly depends on the amount of money you can risk without any stress. But this doesn’t mean you will risk more than 3% of your account balance. If you prefer to trade the market with the high risk it’s better to scalp the market. On the contrary, if you feel comfortable with the 1% risk management policy you should definitely develop a position trading strategy. However, some scalpers often traders the market with a 1% risk since it allows them to protect their investment at any market condition.
Learn from your mistakes
Creating a balanced trading strategy from scratch is a very challenging task. However, if you manage to learn new things from your past trading mistakes, you can easily fine tune your trading strategy. The elite class traders always follow a paper-based trading journal so that they can analyze their past trade data. On the contrary, the novice traders don’t even have a written plan. They simply execute a trade without doing extensive analysis. To be honest they rely on more emotions and thus lose a big portion of their investment. So, if you truly intend to master the art of trading, be prepared to learn from your mistakes.
Taking help from the senior traders
As a new trader, you might have the proper knowledge to create a balanced trading strategy from scratch. This is where you need to seek help from the senior traders. Try to become an active member of the popular trading network site. Analyze the professional trader’s post and see how they make money. If possible, find a mentor who will give you some basic guidelines about this market. Making money in the Forex market is really easy once you have a clear blueprint. It’s not necessary to seek help from the trained professionals but it can significantly reduce the time required to master the art of trading. Always ask for a verified track record from your mentor if you intend to learn by spending money. Think very carefully when it comes to the investment business. Never let your emotions take control of you. Follow the experienced trader’s guidelines to become a successful trader.