Your trading strategy is the heart of your trading business. We all know we can’t live our lives in peace with a weak heart. As a trader, if you feel that your strategy is not up the standard, you should not try to trade with real money. The amateur might think creating a trading method is a very tough task. But in reality, it is the easiest thing at trading business. Controlling your emotions will be tough unless you have a simple and elegant trading method.
A few people buy trading strategy from top tier traders. But they forget the fact that strategies are developed based on personal priority. A top trading system might be useless to many rookies since they may not like the idea of the model. For instance, many people ignore scalping since the associated risk is very high. They love to use the conservative trading method as it helps them to keep the losses small.
Creating the strategy in the demo account
The traders are blessed with the demo account. They can use the demo account as long as they want. For instance, you can open the demo account with Saxo and test different trading techniques with the virtual dollar. Once you learn to make consistent profit in the virtual environment, you might consider yourself good at trading. But this is a big mistake. You need to revise the trading strategy after taking 30 -40 trades. During the trade execution process, you should not break any rules.
Many traders often create the trading method with the faulty demo account. This means the price feed is not accurate and the platform is not that standard. This can limit the profit potential at trading to a great extent and force you to lose money most of the time. Find a broker like Saxo and you will know how it feels to trade in a professional environment. Try it out here and develop your skills using the best technology.
Fixing the faults
After creating the draft of the strategy, it’s time to fix the faults. Those who don’t know the proper way to identify the faults in their system need to learn about the trading journal. A trading journal helps a trader to track the trades in the market. Once you take the trade and maintain the journal you have the required data to revise your trading method. During the bug fixing method, make sure you are not making things complicated. The best trading system in this world is very simple and easy to understand.
After the faults are fixed, you have to back-test the performance of the revised trading system. If you feel comfortable with the results from a new trading system, it’s time to trade with real money.
Adapting to the real market
Adapting yourself to the real market with a new trading system is a very tough task. The majority of the traders don’t know the perfect way to take trades and trade with low risk. But if you take a look at the top traders in the world, you will know adaption skill is very important. Your strategy might tell you to trade with the trend but this doesn’t mean the trend will never change. Global economic news has a massive impact on currency pairs. It can even change a long term trend within a fraction of a second. So, if you are not prepared to deal with such a change, you won’t be able to become skilled at trading.
Adaption is a great skill and is part of your strategy. You need to have a strategic plan by which you will adapt to different changes in this market. Once you learn this technique, you can slowly walk towards the path of success. Never try to run in this market as it can result in disaster.