Most people who come to forex strive to make money as quickly as possible. The desire is quite natural. And as soon as they learn about the existence of advisors, they immediately try to use them in trading. Of course, trading with a robot is that easy. But the results can be very disastrous.
You can return to trading with advisors later, when you have gained sufficient experience in manual trading. This will allow the trader to create a profitable trading system. And only after its successful testing can the advisor be instructed to automatically fulfill the conditions of the trading strategy.
A trader must have a clear trading algorithm in order to eventually become a professional in his field. And today we will figure out what it is.
What is a trading algorithm
To put it simply, this is the order of certain actions of the trader.
And it consists of the following three main areas.
The trader must use both fundamental and technical analysis. This combination will allow you to better assess the market situation and make the best trading decision.
The trader must have clear rules for opening and closing a deal. And not only have, but also strictly follow them.
A trader must determine the degree of acceptable risk for himself and not forget about money management. Taking care of maintaining the deposit is entirely in the trader’s area of responsibility.
How to create a trading algorithm
First, you need to determine which trading instruments will be traded and on what timeframe.
We select the analysis tools that will be used in the TS. Indicators must have a high level of accurate signals.
We determine the allowable size of losses in each trade (stop loss) and the size of the profit, which will become the target when opening a trade order (take profit).
We check the operation of the trading terminal. Orders must be executed instantly.
We set for ourselves the amount of the deposit that we want to see on the trading account in a month, six months, a year.
The trading algorithm should be focused on trend trading.
Every trading day should be planned. If the plan is fulfilled, then it is better to complete the trade. The desire to take an excess profit most often leads to its loss.
The trading algorithm does not imply any strict restrictions. It is a trading foundation that allows for any changes to be made depending on what is happening in the market. Trading must be creative. In this case, it is necessary to comply with the basic requirements. And if you add patience and perseverance to this, then soon you can achieve stable earnings in the market.