Steps To Create Your First Trading Strategy

steps creating first trading strategy forex trader foreign exchange investor

Being able to trade and being able to do profitable trades are two different things. Anyone can learn about trading from many sources. If you want to do profitable trading safely, you must need to have a trading strategy. A trading strategy helps you to stay alive in the trading game although you are having to lose some trades. Learning about trading is not an easy task but making the first trading strategy that will give you a profitable result is very hard. You need to start by having a realistic goal and fixed some trading tools and indicators that will help you to find potential opportunities. 

In this article, we will guide you with a few steps and we hope by following them you will be able to create your first very own trading strategy without following some other trader. 

Market Ideology 

The first thing you must need to consider when you are making the first trading strategy that how this trading market operates and you just need to have the answer to certain questions. The question is “What is the reason that you think that you can make money from this market?” If you don’t have the answer to this question a read more about this market until you have a clear answer to that. After that try to learn both fundamental and technical analysis without giving any effort to learn just one. 

Another thing is that you cannot think trading as a getting rich quick scheme. When you think like this, you must remove this thought from your head. A new trader always needs to try to make his first trading strategy very simple rather than making in the complex. Making a complex strategy for the first time can be the reason for avoiding your trading strategy when trading. 

Choose A Market Where You Want To Trade 

There is a lot of markets where you can apply your trading skill but first, you just need to fix one market where you will trade. The trading markets are Forex, Equities, Options, Stocks, and Futures. If you prefer the CFD market, you need to study and understand this market like what are you buying and selling from a currency quote, how leverage and margin works and how you can calculate them. If you choose to trade in the Equity market, you must need to have clear knowledge about the blue chip and penny stock securities. So, fixing a market for trading helps you to put your attention just to one market and you can dig deep about that market. The elite traders always suggest you trade in a specific market. The do so because they know it will improve their execution process. 

Choose Your Trading Time Frame 

Before you start trading you just need to fix a trading time frame according to your personality. The time frame depends on the type of trader you want to be like if you are a scalper, you like look for signal in 5 minute or 15-minute chat because it will be more effective. On the other hand, if you want to be day trade and don’t want to keep your trades open for multiple days. You must need to look trades in a higher time frame like 1 hour or 4 hours or in a 1-day time frame. There are also a few traders who like to keep their trade open for multiple days even some cases for weeks or months to get their potential results. So you must consider your preferred time frame when you are making a trading strategy. 

Fix A Set Of Tools 

Your trading platform will provide you with many tools and indicators which will help you to find the information that you need to open a trade. You cannot use all the tools and indicators. Rather, you must make a set of tools and indicators work to your advantage. Although they will automatically calculate risks we suggest that you to at least know how these tools and indicators work. 

Determine Risk 

Whenever you invest some money in your trading account, you must need to fix an amount which you are ready to lose through trading. You will not surely lose it but it will help you to measure your risk-reward ratio according to your trading balance. So fixing a risk-reward ratio is very important to having a profitable trading career. 

Find Forex Fortune

These are the key things that you need to consider when you are making your first trading plan. You need to improve it with time and as you gain experience in FX trades.

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