Create a new trading strategy in 10 steps #203

How you create a good trading strategy in 10 steps:

1. Think about the idea and premise of your setup (trend following, breakout, reversal, day trading, swing trading, etc.)
2. Write down some basic rules for entry, stop, target
3. Find 10 - 20 screenshots of the perfect trades based on the previous rules and premises
4. Analyze the collected screenshots and write down what they have in common
5. Update your rules from step 2 and get more precise based on steps 3 and 4
6. Now do a backtest and find at least 30-50 trades in the backtest
7. Analyze the backtest results and adjust rules if needed
8. Do another backtest and start experimenting with different exit, stop, and target strategies
9. Find the optimal set of parameters and write out all final rules
10. If backtest shows profits, then take it on a demo account

 

 

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