There are thousands of strategies out there, and we mean thousands, all sorts of things are available, you will also get people claiming that their strategy is making them $11 to $500 per day, or they are making 10,000 pips per month, these are huge results and very tempting, but you also need to ask yourself does it sound legitimate? These people claim to have the ultimate strategy, well they can’t all have the ultimate strategy now, can they?
Instead of looking towards them or even using them as a comparison, it is important that you create a strategy that works for you, build it from the ground up in a way that suits your strengths and weaknesses, and also your style of trading. Having done all that, you will be good to go and will be profitable right? Well, not exactly, even with a strategy that you created yourself, there will be flaws in it, in fact, many people who have now found their preferred and most successful strategies would have been through another 10 before that which didn’t turn out quite so well.
So once you have gotten your strategy set up, what sort of things would make you give it up and start again? That is what we will be looking at now.
You’re Spending More than Your Earning
We will get this one out the way first, this is more for those that purchase signals or Expert Advisors (EAs), are they actually making you any money? If you rent an EA for $200 per month and it earns you $150 per month on your account, do you think it is worth it? You are making a net loss of $50, so why are you still suing it? Why would you purchase something that actually makes you a loss? Get rid of it and start looking at your own strategy, a hopefully profitable strategy.
It’s Not Profitable
Keeping along the same lines as the previous point, some strategies just aren’t profitable, you can have a successful strategy that doesn’t actually make you any money, strange I know, but possible. This is often down to bad take profit and stop loss levels and risk management, risking too much per trade can actually give you more wins than losses but the monetary value of the losses is higher than the wins. If this is the case, then it is time to evaluate the strategy to look for an entirely new one to build.
It’s Hard to Stick to the Rules
When setting up a new trading strategy, it should come with some rules, these are there for a reason and they are often the reason that the strategy works. They help to improve consistency and overall profitability. So if you have a strategy that seems to be working, but you are finding it hard to stick to the trading rules set by it, then, in the long run, there is a good chance that you could start to incur losses. It is actually impossible to wor out the profitability of a strategy if you are constantly making changes and breaking the rules, so if you are not able to, it would be a good idea to try and create one that you are able to follow.
The Strategy Takes too Much Effort
When you create a strategy, you also need to take you into account, these are things like the time you are free to trade, your sleeping patterns and so forth, if you like in Europe, there is no point in creating a strategy that requires you to be awake during the Asian markets, otherwise you will be up the entire night. Do you need to look at 108 different indicators in order to find the right signal, well that isn’t maintainable, you need to set up a system that you will be able to use without too much effort, and certainly without causing sleep deprivation.
All of the points above are reasons why you may need to give up your strategy, remember that trading forex should not be a chore, it should be a learning and enjoyable experience, if your strategy is turning that into work or causing frustration then it may be time to start looking for a new one.