February 20, 2023

Create a new trading strategy in 10 steps #203

10 minutes

How you create a good trading strategy in 10 steps:

Think about the idea and premise of your setup (trend following, breakout, reversal, day trading, swing trading, etc.)

Write down some basic rules for entry, stop, target

Find 10 - 20 screenshots of the perfect trades based on the previous rules and premises

Analyze the collected screenshots and write down what they have in common

Update your rules from step 2 and get more precise based on steps 3 and 4

Now do a backtest and find at least 30-50 trades in the backtest

Analyze the backtest results and adjust rules if needed

Do another backtest and start experimenting with different exit, stop, and target strategies

Find the optimal set of parameters and write out all final rules

If backtest shows profits, then take it on a demo account

Do you want to get more trading tips and insights from me?

Then take a look at my weekly trading newsletter which I am sending out every Thursday:

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Disclaimer: The experience reports and comments constitute the personal experiences of our users. These are individual results that do not permit conclusions to be drawn about future developments. In particular, we make no claim that these are typical results that can be achieved by our users on a regular basis. Tradeciety can neither predict nor guarantee the occurrence of certain developments or the achievement of profits, nor will it do so.

Results may not be typical and may vary from person to person. There are inherent risks involved with investing and trading, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk.

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