When people are looking for a new forex trading strategy, what they really want to know is:
- How do I create a strategy that works?
- How do I develop the confidence to trade a strategy I believe in?
The first question almost goes without saying. Without a working strategy, there’s no use in attempting to trade in a consistent and profitable way. The second question, however, is more subtle. My opinion is that if you have a working strategy but don’t have a deeply rooted belief that you can trade this strategy, you will fail.
Confidence in a strategy will make or break your results.
Fortunately, there is an answer to both questions: testing.
Before I ever use a strategy, I will have tested it for weeks. For months. It’s not an extremely difficult process, but it does involve a lot of work. During the years, I’ve tested 100’s of strategies. Most of them failed. Some of them, I could make work. The best ones, I’m trading today. Here are the steps involved to make it happen.