How to Design Your Own Forex Strategy/System-Complete Guide


Forex Trading can make your life so better and can make you a rich man But if you did not trade accourting the market Forex can make you poor man as well. there are many people who get success in forex but after that success, they lose there all money in a single night. so it means that if Forex has the ability to make you rich in a single but it can take you all money back in a single night or in an hour. if you are Forex Trader then you should trade carefully. you should use different Forex indicators, Analyze the market, watch towards news and Design your own Strategy. if you Don’t know about Forex Strategy Click on What is Forex Strategy-Top 5 Best Forex Strategies. if you have effective Trading Strategy your most trade will close in Profit. Designing a Forex Trading Strategy is a hard task to do but it is not impossible. if you do hard you can create your own and effective Forex Trading Strategy. so in this Article, we will talk about How to Design Your Forex Strategy. without wasting time let’s begin

How to Make/Design you Own Forex Trading Strategy/System

1. Select Time Fram which is Better for Your Trading Strategy

foreign exchange
The first thing you need to decide when creating your system is what kind of forex trader you are?

  • Day Trader
  • Swing Trader

Do you like looking at charts every day, every week, every month, or even every year? How long do you want to hold on to your positions?  This will help determine which time frame you will use to trade. Even though you will still look at multiple time frames, this will be the main time frame you will use when looking for a trade signal. so find out your best and suitable time Fram in Forex market Chart then you can go with next step.

2. Find out the Indicators that Help you to Identify a New Trend

Since one of our goals is to identify trends as early as possible, we should use indicators that can accomplish this. Moving averages are one of the most popular indicators that traders use to help them identify a trend. they will use two moving averages (one slow and one fast) and wait until the fast one crosses over or under the slow one. This is the basis for what’s known as a “moving average crossover” system.  In its simplest form, moving average crossovers are the fastest ways to identify new trends. It is also the easiest way to spot a new trend. Of course, there are many other ways forex traders spot trends, but moving averages are one of the easiest to use. mostly moving average works but sometimes it doesn’t work.

3. Find Best Indicator to Help Confirm the Trend

forex trading
Our second goal for our system is to have the ability to avoid whipsaws, meaning that we don’t want to be caught in a “false” trend. The way we do this is by making sure that when we see a signal for a new trend, we can confirm it by using other indicators. There are many good indicators for confirming trends like MACD, Stochastic, and RSI. As you become more familiar with various indicators, you will find ones that you prefer over others and can incorporate those into your system. after that, you can find a better indicator for your system.

4. Define you Risk for your Trade

best forex
When developing your forex trading system, it is very important that you define how much you are willing to lose on each trade. Not many people like to talk about losing, but in actuality, a good trader thinks about what he or she could potentially lose BEFORE thinking about how much he or she can win. The amount you are willing to lose will be different than everyone else. You have to decide how much room is enough to give your trade some breathing space, but at the same time, not risk too much on one trade. money management is a very important section in designing a strategy/system.

5. Define Entries and Exits

Once you define how much you are willing to lose on a trade, your next step is to find out where you will enter and exit a trade in order to get the most profit on your trade. it is also an important section in designing your own strategy/system.

  • Entries

Some people like to enter as soon as all of their indicators match up and give a good signal, even if the candle hasn’t closed. Others like to wait until the close of the candle. Others like to wait until the close of the candle. Pip Surfer, believes that it is best to wait until a candle closes before entering. He has been in many situations where he will be in the middle of a candle and all of the indicators match up, only to find that by the close of the candle, the trade has totally reversed on him!  It’s all really just a matter of trading style. Some people are more aggressive than others and you will eventually find out what kind of trader you are. waiting better rather place a trade quickly.

For example, in the chart below, this trader’s entry was when the candle closed below the support line.

  • Exits

For exits, you have a few different options. One way is to trail your stop, meaning that if the price moves in your favor by ‘X’ amount, you move your stop by ‘X’ amount. Another way to exit is to have a set target, and exit when the price hits that target. How you calculate your target is up to you. For example, some traders choose to support and resistance levels as their targets.

In the chart below, the exit is set at a specific price which is near the bottom of the descending channel.


Forex Strategy

Others just choose to go for the same amount of pips (fixed risk) on every trade. However you decide to calculate your target, just make sure you stick with it. Never exit early no matter what happens. Stick to your trading system! After all, YOU developed it!

6. Write Down your System Rules and Follow it

Forex Strategy

This is the most important step of creating your trading system. You MUST write your trading system rules down and ALWAYS follow it. Discipline is one of the most important characteristics a trader must have, so you must always remember to stick to your system! No system will ever work for you if you don’t stick to the rules, so remember to be disciplined. just remember that believe in your self and always stick to your system/strategy. if it does not work properly just improve your system/strategy. test indicator and Add more indicators improve your system. if you believe your self it will work definitely.

Hope this Article Help you to Know more about How to Design your Own Forex Strategy/System

Also Read: What is Stop-Loss and Stop-Loss Management in Forex Trading?

Related: Top 10 Best Personal Loans Companies in the United State of America

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