Guide To Creating Your Own Forex Strategy
All the time, people will think of Forex trading as an intimidating thing or skill. Still, when I look back, I can’t really pinpoint how I came to know what I know now about trading the Forex market.
I completely understand a beginner’s pain hearing all these terms like “Spread” or “Margin” or even “Pips.” So I started thinking about what advice I would give to myself back in high-school when I didn’t know anything about anything at the time.
“Firstly, it’s going to take time” I guess nobody wants to hear that part because we want to make money as soon as possible, not “at some point,” but that’s the truth. I didn’t realize everything all at once.
Over TIME, things started making sense piece by piece, literally building a puzzle. I learned, then applied, learned something else, then failed, then scratched, the re-learned and re-applied! You catch my drift.
A long process of self-teaching and trial by error eventually has you knowing things that you couldn’t begin to explain because it was an old piece of the puzzle you stumbled upon trying to build this system.
Therefore time is definitely something I would be real with myself about because I didn’t have a mentor as such, couldn’t afford to pay for one (real talk), so I figured I’d bump my head into this thing until it finally stuck.
Truth is, it was painful, still is when I think how much I’ve given of myself to this thing we call trading.
That couldn’t have happened if I had quit when I couldn’t figure out when to get out of the market or how much to risk, so I don’t keep blowing accounts.
So get comfortable on the journey and trust the process of learning a new skill. It will take time.
Pin the tail on ANYTHING!
Try everything out! At first, you never know what will resonate with you and how you feel comfortable trading.
If you have NO STRATEGY… Start FORECASTING.
Start predicting where the market is going to go and keep a record of it (Journal). Were you wrong? Were you right? By How much? Do this for every day that the market is open, and you’ll start to see patterns in the market, and that will be the opening for you to birth a system.
Once you find a pattern in your predictions, you can start to gauge entries, exits, and risk – But let me backtrack.
If you’ve been forecasting the market for some time and realize most times you were right (price had momentum or was breaking out or had good candlestick patterns forming), you might also learn that you saw these patterns working when there was an uptrend or a downtrend.
Go back and FILTER your forecasts and look for these specific ideas (because that’s all a strategy starts out as, AN IDEA), a Repeatable pattern that you can consistently trade and make a profit on over a long time.
Forecast to find a pattern. It might be difficult at first because it’s new and you know only a little about the market, but push through and continue keeping track of your forecasts and studying them. You will most likely find a pattern.
The pattern is the first stage. I like to think I have an eye for trading. I can see the chart patterns, but what took me a REALLY long time was finding out my entries, exits, risk and what market I would trade.
Playing soccer on grass is easier than playing it in the mud. Playing soccer in the mud is easier than playing it underwater.
That’s how most strategies are. They work better on some instruments than others. They just do. And from experience I can tell you for free, you won’t have to work hard to find out what represents the grass, mud or a pool.
Check your trading history. I used to trade 10+ currency pairs, and what should’ve taken me a couple of months to figure out took years because I had no guidance and, honestly… no talent for RISK or MATHS because that’s all it is.
I thought the more pairs you trade, the more money you’ll probably make. What I found was a pattern! I would make a bajillion dollars trading one pair and lose that same amount trading another pair.
When writing this down, you can clearly see the problem. I did not! For a long time. I wasn’t looking.
You might think it’s bad luck or just your system that has flaws, and you try to fix something that isn’t broken instead of just focusing on what works and cutting what doesn’t work.
This is how you start to build YOUR OWN strategy. It won’t be easy, and I recommend buying one if you can! But if you cannot, like I could not – Start predicting, making mistakes, and learning.
Don’t bet the farm.
Don’t lose your shirt.
Cut the L.
Keep the W.