It is important for every beginning trader to understand what a trading strategy is. In the understanding of professional traders, a trading strategy is not an algorithm or a set of indicators that every trader can buy and blindly follow its settings to earn from day to day. A trading strategy is a set of rules of a trader and brings him the most positive result. Any deviation from the strategy leads to losses.

Trading strategy describes the conditions under which the trader can open and close positions.

Next I would like to break down the rules that I emphasize myself and maybe they will serve as inspiration for your strategy.

Entry rules are the conditions that tell the trader whether to enter a trade or not. But the thing is, these conditions can vary.

For example:

Trading signals are different in terms of response time. For example, in trading often use entry signals on the breakdown of the level. The trader, having analyzed this signal, does not enter the position immediately, but waits for some time until some contracts are executed.

Trading signals are different in terms of response time. For example, entry signals on level breakout are often used in trading. The trader, having analyzed this signal, does not enter the position immediately, but waits for some time until some contracts are executed.

Determine which market conditions gave you the greatest profit. Write them down in a separate notebook or on a sheet of paper and hang them in front of you. Every time it “seems” that the trading situation can give a good profit, go through with your eyes, whether the deal meets the criteria of the entry point, which you have previously defined. If any of the criteria do not match — the trade will be impulsive, will not be in line with your trading strategy. As a result — a loss.

Signals for entry should be obvious, so that in the busy environment of the trading day you can act clearly according to the plan and do not lose sight of anything. If the entry rules turn out to be quite complicated, you will “slow down” during trading and make mistakes.

For me to avoid mistakes, it becomes quite useful to use algo-trading or platforms that analyze the market automatically, looking for entries and exits based on my strategy, and notifying me about them. Which in fact is less time-consuming and more accurate display of data for the final decision, although this as in general strategy is an individual tool and works differently for each person, as much as the future does not scare me this modern approach to trading really reduces the time to search: to entries and exits.

Closing a deal works in the same way as the entry rules. In more, the parameters of conditions are the same: fundamental analysis, trend, price, indicators, volumes, aggression of participants, and others. This part of your trading strategy most of all determines where the stop loss will be located, and how it will be: potential, pre-placed, fixed or trailing stop (following the price). When a trader knows in advance when he will close a position, he anticipates potential risks/losses.

Ask yourself these questions and the answers will become your exit rules. Remember, actually opening/closing a position is not difficult, it is more difficult to do it correctly. This is the difference between a professional trader and a beginner.

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