Find your own Trading Strategy

A trading strategy is a guideline that you must follow in all of your trades, without exception. This is what determines your buy/sell prices and tells you when to cut your position (in gain or loss). A trading strategy also includes risk management. We don’t copy a strategy, we build it! Your trading strategy must match your investor profile (your personality, your trading preferences, etc.).

If you copy another trader’s trading method, you risk calling it into question at the lightest phase of loss, you will not be able to change it if market conditions change, and above all, you will find it difficult to apply if it goes against your nature as a trader. Whether you swing trade, scalp, or day trade, you must define your own method to become a real trader.

Find your own Trading Strategy

Before investing in the stock markets, you need to find out which financial markets your trading strategy works best, the financial instruments you will use, and determine the appropriate leverage to properly manage your risk.

Find your trading strategy takes time, a lot of time. You must open a demo account with a broker (regulated by the AMF or the FCA) and practice at length to first identify the elements you want to integrate into your trading strategy, then test it for several weeks to see if it saves you money.

Be aware that depending on the financial market in which you trade (Forex, Shares, Indices, etc.), the performance of your trading strategy can vary greatly. Your strategy may also perform better on certain types of assets (CAC40, EUR/USD, DAX, etc.). Finally, you must choose the appropriate financial instruments (futures, CFDs, etc.) to make the most of your strategy. Becoming a trader does not happen overnight. You will spend a lot of time analyzing your charts. If you still have the motivation to train yourself in trading, this section gives you food for thought to find your trading strategy.

A winning trading strategy is not for everyone

Novice traders often mistakenly believe that there are miracle trading strategies, which make you win almost every time. This is why they often try to copy the strategies of the best trading platform in Georgia. At first glance this seems like a good idea, why can’t a strategy that works with one trader be applied successfully by others? However, in reality, if you give a winning trading strategy to another trader, he will lose. The reasons for the impossibility of copying a trading strategy are multiple :

Time unit used: A strategy that works on a daily does not necessarily work in the shortest term and vice versa (see Trading: Which time unit to choose?)

Psychology of the trader: Each trader has his preferences and a profile of his own. For example, some are more comfortable in scalping and others in swing trading. Applying a strategy that is not in line with one’s investor profile is impossible in the long term. You will always be tempted at some point to deviate from the initial trading strategy.

Money management: Risk management is very personal, it depends on psychological factors (risk aversion, resistance to stress, emotions) but also and above all on the experience gained in trading (placing stops, moving stops, taking anticipated profits…). All this cannot be learned, we only acquire it over time by dint of

Confidence:

Here is another element that cannot be acquired. I am not talking about self-confidence but about confidence in your trading strategy. If you have created it and it gives good results over the long term, the phases of losses (which are part of trading) will not scare you. On the other hand, a trader who applies the strategy of another will begin to doubt at each phase of loss. He will end up doubting the signals given to him.

Processed product: A strategy that works on a specific asset does not necessarily work on all the other assets.

All of these elements mean that you cannot win by applying another trader’s strategy. You have to create your own strategy. That doesn’t mean that you can’t take inspiration from other traders’ trading strategies. But you must add elements that are unique to you. A good trading strategy is personal.

Qamar Tanoli