If your goal is to become a professional trader in the Forex market, you need to recognize both good and bad trading strategy. Although the most obvious way to test a strategy is to look at profit and loss, which is the result of that strategy, there are other factors that we can choose a good strategy considering them.
The transactional strategy must be personal
The transactional strategy must be personal for clarity reasons. One reason is that markets are sometimes too unstable. Many of the traders are implementing the “high – risk” strategies that can be an inappropriate option for you. This is a sufficient reason to look at them on the basis of risk management when trying to copy other trader’s transactional strategies.
Be true to yourself: If you are not comfortable with dealing with a strategy or you can’t abide by all rules of a transaction strategy, it doesn’t matter if it’s profitable in the long-term; you can’t implement the rules, and finally you don’t get optimal results.
Having a correct understanding of the probability of success
The probability of success is a term that you have to use when you want to see that a trading strategy is good or bad. A trader, considering the probability of success, will find out whether his trading system has a high chance of earning money in the long-term or not. The probability of success is calculated by considering the results obtained from a given strategy. If it is negative, strategy will be harmful and if positive, it will be profitable. Learn mathematical formula for the probability of success:
(percentage of profit x average profit size)- (% loss x average loss size)
The formula tells you how much you can expect from each transaction. It doesn’t matter that all your dealings are profitable, but you should profit more than you lose. For example, there are traders who take advantage of only 15 % of the time, but the same benefits are much higher than all others; then they are proven to be using well – paid transactional strategy. The question you have to ask yourself is if you can act on such a system? Because most people can’t and failing to do so is the traders Achilles heel who if they don’t work on this side, they will soon give their market to competitors.
Does a transactional strategy depend on certain variables?
Some transactional strategies depend on certain variables and inputs. For example, there is a strategy called the London Daybreak Strategy that focuses on London’s reaction to the arrival of British and European traders. It is clear that if you are asleep or working on your daily basis, this strategy will not be profitable for you. In this case, it doesn’t matter whether the transaction strategy is good or bad; what is important is that it’s not fit for you. Luckily, there are many strategies that can suit you. So all you have to do is choose a strategy that has the variables that suit you.
One of the things you always have to consider is that markets change. Many of the traders resist the change of the system they deal with on a daily basis, but if we want to look realistic, it is sometimes necessary to do so. For this reason, you should always seek potential changes to your desired strategy performance. A good trading strategy meets the new conditions of the Forex market.
For example, there may be no change in the markets for a couple of days and you have to know what to do in these circumstances. Obviously, a long – term transactional strategy will not perform well in such situations. For this reason, each trader needs different systems that must be used at the right time. When you are learning a new strategy, you need to learn what the appropriate strategy is, what markets, and what kind of process. In this case, you can be sure that in any case your transactions are profitable, or at least harmless. In simple words, even the best transactional strategies do not always lead to positive results. So the best thing you can do is learn a few reliable strategies, and when changing your market, see a good strategy for the new market performance.
We believe that strategies are tools. In other words, you have to use the right tool for everything. Also, we believe there is no skeleton key. Therefore, this paper is one of the articles you may need to study several times and times. One of the common principles of the Forex market is that, if you give a profitable strategy to the two traders, you may encounter different results. This is the most important point in mind to remember that any transactional strategy can be either good or bad depending on how to run it.
We hope that you will use from this ITBFX brokerage article and feel the difference between the results and the profits you make by applying the subtleties of it. Our business experts are trying to turn the website into a definitive source of transactional information every day, and you can only give us the confidence of how successful we have been on this route. You must then register your questioning, challenge, graduate and incentive comments in the comments section.
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