What a Working Trading Strategy Consists Of... š
When a trader hears the word āstrategy,ā many imagine a complex formula or dozens of charts with various lines. In reality, itās much simpler.
š A working strategy includes just a few essential elements:
1ļøā£ Timeframe ā the time interval you trade on, from 1 minute to a week. Everyone chooses according to their style and available time.
2ļøā£ Instrument ā a currency pair, cryptocurrency, or any other asset. Itās impossible to trade everything equally well ā itās better to focus on 1ā3 instruments.
3ļøā£Entry conditions ā a clear signal that tells you when to open a trade. This could be a breakout, a bounce, an indicator, or a combination of factors.
4ļøā£Exit conditions ā where to take profit and where to cut losses. Itās important not to guess here but to know in advance what to do in any market scenario.
5ļøā£ Risk management ā position size, acceptable risk per trade, and total account risk.
ā ļø The problem most traders face is that they more or less define their timeframe and instrument, but their entry and exit conditions remain vague.
As a result, trades are opened ābased on a feelingā and closed in panic or too late.