Building a trading strategy from scratch takes careful planning and patience. Follow these seven steps to develop one that is realistic and sustainable:
Define your trading objectives and risk profile: Are you aiming for growth, income, or preservation of capital? Know how much risk you are comfortable taking.
Choose a market and timeframe that match your lifestyle: Align your chosen market (e.g., forex, stocks, crypto) and your preferred trading timeframe (scalping, swing trading, etc.) with your schedule and availability.
Research and design a strategy with clear rules: Study how the market behaves, then create a set of entry, exit, and risk rules based on patterns or data you trust.
Backtest on historical data: Before risking real money, check how your strategy would have performed in the past. Look for drawdowns, win rates, and average profits.
Practice on a demo account: Simulate live conditions without risking capital. This helps you build confidence and spot practical flaws in your plan.
Deploy live with small positions: Transition to a real account gradually, using small trades to build experience without exposing yourself to large losses.
Monitor, review, and refine regularly: Keep a trading journal, analyse your results, and adjust your strategy as needed to keep pace with changing market conditions.