Reshuffle your Forex Strategy
Forex Trading strategy is a tool to achieve the goal
If a president needs a strong cabinet to manage the wheels of government well, then a forex trader needs a good trading strategy to achieve the final goal: consistent profit.
There is no perfect forex trading strategy, in the sense that there is no strategy that can work well in all market situations. There are times when a strategy cannot work properly. For example, a trend -based strategy will not be able to get profits as expected when the market is moving in sideways conditions. Conversely the strategy for the sideways market also did not work when the market was trending.
So, there really is a time when a forex trading strategy cannot be executed. Even though strategy is one of the required tools in trading and its function is very important.
Then how to work around this?
The ability of forex trading strategies that are not “weather resistant” is limited. For this reason, you must conduct regular evaluations that are adjusted to the latest forex market conditions.
If you find that the forex trading system cannot provide maximum results. Or even get a loss that is greater than profit in a certain period of time (for example a month). Then it’s time to do an evaluation. Don’t wait until your money runs out. Then then you realize that something is wrong with the forex strategy that you are running.
Likewise, if it turns out that the profit that you get exceeds your expectations, you must also do an evaluation. With evaluation, you will know in what kind of market situation – or which currency pair – your strategy reaches its best performance.
Return to the evaluation for a while.
Earlier it was mentioned that you must be able to know the symptoms that something is wrong with your forex trading strategy before “something” undermines your capital until it runs out. One of the parameters – above has already been delivered – is when the loss percentage is greater than the profit percentage.
Find out what’s “wrong”. Have you really obeyed the rules of the forex strategy? If yes, then try to pay attention to the market situation when the successive loss occurs. Is the forex strategy that you are running according to the current market situation?
If the answer is “no” – for example, the market is sideways while you apply the trend following strategy – then it’s time for you to reshuffle. Change strategies by implementing strategies for the sideway market. For this reason, you must have some kind of backup strategy, or – my term – backup plan.
Along with the development of your experience and knowledge, there is a possibility that there are several forex strategy parameters that must be replaced. For example, if you find that there are indicators that are more suited to your trading style, then it doesn’t hurt you to replace the old indicator with the new one. Of course before doing that, you must really have learned well the new indicator, in the sense of knowing its advantages and disadvantages. A kind of fit and proper test . It turned out that the cabinet step reshuffled as was done by traders.