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Goals facing the investor
The key moment - remember the song in the movie about the Russian agent 007, aka Shtyrlitz, aka Isaev, and so on. "What does the family begin with? WITH…..". By setting the expected level of profit on his investments, the trader forms a certain attitude towards choosing a trading strategy, which in turn will affect the frequency of transactions, the criteria for making decisions about entering into a deal, etc. In addition, the selected (or expected level) income will affect the choice of instrument. Trading strategies applied to one currency pair will not be profitable when working with others.
Psychology of the trader
There is such an important component in trading - the psychology of the trader. Sometimes two traders, using one trading strategy, get two completely different results. There are many such examples. Everyone has their own approach to risks and additional methods of analysis. One trader will act strictly according to the rules of money management, while the other will ignore them. Someone will enter and exit a little earlier than the trading strategy prescribes, someone a little later. Naturally, all this affects the final profit from the strategy used. In addition, it is difficult for the trader to predict his own behavior when faced with a new trading situation. It is strongly recommended to run almost all trading strategies on a strategy tester and test them on a demo account before introducing them into your arsenal of actions.
Methods of achieving goals
Trading in our time has an undoubted advantage over trading in the past. The availability of technical capabilities - indicators and advisors - sets the investor the task of choosing which of the methods - manual or automatic trading - will be the most effective for obtaining profit. Some traders prefer only manual, some - only automatic, but the majority combine both types. Automatic trading is an undoubted plus. Many automated systems are available on the Internet. For a beginner trader, using advisors is a good opportunity to start trading with minimal knowledge of technical and fundamental analysis. In addition, robots are completely devoid of a psychological component in trading, they do not allow trading mistakes for emotional reasons. But still, you should not transfer the work to a full trust management or your trading account. The biggest profit and experience is usually generated by personal trading.
Capital Management
The trading strategy consists of a trading system and capital management methods. Mana - management applied in a specific trading system sets the profitability threshold and the amount of future losses. Various changes in the concept of capital management can change the trading strategy from conservative to aggressive and vice versa. When using a conservative trading strategy, the investor focuses on a conservative income with moderate risks, with an aggressive one, the risks are higher, but the income is higher.
The trader has the right to apply one or another trading strategy to the selected instruments. However, it should be remembered that creating a single strategy applicable to all market instruments is difficult, due to the difference in the functioning of the instruments themselves. Therefore, it is desirable to use different trading strategies for different trading instruments, taking into account individual characteristics, thereby making trading more effective.
When choosing a trading strategy, you should focus on personal preferences and work comfort. If the selected trading strategy is somewhat difficult to study and apply, then it is better to refuse to work with it. In addition, the psychological attitude of the trader should correspond to the feeling of confidence when working with the trading strategy. The trader should not doubt the signals and the actions he takes based on the chosen trading system. A question often arises - is it possible to buy a successful trading strategy without spending personal time on developing and testing one? Features of the trading strategy are its individual adaptation to the trader. The closer and clearer to the trader the actions on the basis of which he receives profit, the more effective the trading strategy will be. Therefore, what may suit one investor, cannot be effectively used by another. As in the proverb "What is good for a Russian is death for a German."
Creation of a trading strategy is one of the priority tasks in trading facing a trader if he aims at systematic profit making. The use of fundamental data and technical analysis tools alone is not enough. In addition, the trading strategy must take into account the available capital and the postulates of management. A trading strategy should have clear rules of possible profit and loss. The trader must clearly follow the developed trading plan and have the opportunity to monitor the success of the decisions made. Compliance with all these rules is the key to successful trading on the forex market.
