#FOMCMeeting Building a Trading Strategy (2)
Third: Choose the Analytical Tools You Will Rely On
Technical Analysis: Based on reading charts and indicators such as RSI, MACD, moving averages, etc.
Fundamental Analysis: Based on news, projects, earnings reports, and the overall economic landscape.
Sentiment Analysis: Understanding market psychology and predicting investor behavior.
Most successful traders combine these tools depending on market conditions.
🧠 Fourth: Design Entry and Exit Rules
To make your strategy clear and practical, you must precisely define:
When to enter a trade? (e.g., when a resistance is broken + confirmation from RSI)
When to take profit? (e.g., upon reaching a technical target or a specific percentage gain)
When to cut losses? (e.g., if a strong support is broken or the price drops by a certain percentage)
These rules reduce hesitation and randomness in your decisions.
🧪 Fifth: Test Your Strategy Without Risk
Use a demo account to test your strategy before using real capital. Monitor results over several weeks and take notes:
Does the strategy work in all market conditions?
What is the success-to-failure ratio?
Does it meet your intended goals?
Make adjustments as needed until you reach the desired performance.
🛡 Sixth: Capital Management… The Key to Survival!
Even the best strategies can fail without proper capital management. Some basic rules:
Don’t risk more than 1–2% of your capital in a single trade.
Always use stop-loss orders.
Avoid overtrading.
Risk management protects you from collapse and ensures long-term sustainability.
🔄 Seventh: Commit, Improve, and Stay Flexible
Markets are constantly changing, so stay flexible and adjust your strategy when necessary—but don’t change it after every small loss. Commitment along with continuous improvement is the true key to success.
