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Based out of Auckland, New Zealand, we bring an institutional trading experience to the retail market.

Expert Advisors can be a godsend for Forex traders. Automatically finding new opportunities based on your parameters, emotionless trading, timesaving, back-testing – the benefits speak for themselves.

However, what if the promise of a Forex EA is too good to be true? What if the hours spent carefully crafting an automated version of your own trading strategy ends in an EA that isn't up to scratch? It's often the case that an EA simply isn't good enough, either through inconsistent work performance or perhaps not working at all.

But don't throw the towel in just yet. We've put together 11 tips to transform your EA into the trading maestro you always hoped it would be. And if you're already satisfied with your EAs performance, these tips will help take their output to the next level.

11 tips to improve the performance of your forex EA


#1. Taking advantage of market conditions:

One of the main reasons some Forex Expert Advisors don't work correctly is because they struggle to adapt to dynamic market conditions. Programming your EA to perform in any situation optimally can be a nigh-impossible task. The alternative is to program your EA to work optimally under specific conditions and only use it when those conditions arise.

For example, if the market is trending, you could deploy an EA that's specifically programmed to perform in trending markets. Then if it's a choppy market, you can switch it up and run your range trading EA.

Ranges and trends can last for long periods in forex markets, providing you with an opportunity to take advantage of this with your specially programmed EAs.


#2. Always have an exit plan

Be honest with yourself. Do you have an exit plan ready for when things turn sour? What's your plan if your range trading Forex Expert Advisor is caught in a breakout? Or if your momentum EA becomes the victim of a short squeeze?

Identifying market conditions is one thing. However, it means nothing if you don't have an appropriate exit plan in place for when the market shifts.


#3. Properly utilising non-correlated EAs.

The use of non-correlated Forex EAs cannot be underestimated. By running multiple non-correlated EAs across different strategies and timeframes, you'll have all your bases covered. For example:

Diversifying your EAs will make your trading more robust and will ensure that if one of your EAs isn't optimally performing, you'll have another EA offsetting this.


#4. Allocate funds to your EAs according to performance

How much are you willing to allocate to your best and worst-performing Forex EAs? If you're underfunding your best performing EA, you're doing yourself a great disservice. Vice versa for your worst-performing EA.

 

#5. Trade less when in a drawdown:

It may seem obvious; however, you'd be surprised at the number of forex traders who don't reduce the size of their trades when their Forex Expert Advisor is experiencing a drawdown.

Spend time analysing your EA, so you know what to expect from it over time. That way, it's easier for you to identify when it's going through a losing period, and you'll be better prepared to cut your trade sizes accordingly.


#6. Trade on a low spread account to reduce costs

Reducing your costs is the quickest and most straightforward way to improve overall returns. Trading on a high spread account can be risky in two ways:

For this reason, you should also consider a low spread with a commission option, which may be better suited for Forex EA trading. The BlackBull Markets Prime account may be more suited to your trading style.


#7. Minimise your MT4/MT5 workspace

Execution can mean the difference between a profitable or losing trade. In the world of trading, milliseconds can have a considerable impact.

One way to boost execution is to minimise the number of windows open in your MT4/MT5 workspace. Small things such as closing the market watch window and other data-heavy applications can make all the difference to execution speed.

 

#8. Utilise a co-located VPS:

In an ideal world, your Forex Expert Advisor would have zero delays in any of their order executions. You'll be pleased to know that with a co-located virtual private server (VPS), this is a possibility. With a VPS, your EA is installed on a computer in our data centre which you can access via the internet, cutting delays and improving reliability and redundancy compared to running the EA on your own server.


#9. Get familiar with your MAE and MFE:

By becoming familiar with your Maximum Adverse Excursion (MAE) and Maximum Forward Excursion (MFE), you'll be better placed to improve the performance of both systems.

For example, your MAE can inform you of how far your trades go into the red before making a recovery. This assists you in optimising your stop-loss placements which will improve the overall risk and reward ratio of your EAs trades. Knowing your MFE has similar benefits. The MFE can show you how much profit your trades are making before they start to reverse.


#10.Use live data to back-test your strategy

Just because your trading system looks good on paper doesn't mean it's going to be effective once it's live. More often than not, it's a result of poor-quality pricing data used in back-testing.

To avoid this downfall, ensure your strategy is tested on the exact data you plan on trading.


#11. Use a scale-in position sizing algorithm:

While it can be tempting to spend time improving your entry rules, it's far more lucrative in the long run to focus on position sizing.

In his book, The Definitive Guide to Position Sizing, Van K. Tharp found that scale-on models that follow this approach are one of the best ways to improve the performance of any strategy. Adding scale-in rules to your EA is a quick way to make incremental improvements to your EAs performance.


Final thoughts

Reduce stress and improve the performance of your Forex EAs by following the above tips. Being proactive and appropriately managing your EAs can make all the difference in long-term performance.

As a trader, it's a general rule of thumb that we should always be looking to maximise potential returns (per unit of risk) with each transaction. We should always be looking to squeeze as much out of the market as we can.

There are times when this can occur by simply letting the trade run its course. However, sometimes market conditions align perfectly for savvy traders to "press the trade" or  Pyramiding into the trade.

Don't press your luck; press the trade instead!

Attempting multiple entries in the direction of a trend is one strategy savvy traders use in an attempt to maximise return (otherwise known as Pyramiding). The problem with this tactic is that while it may increase the potential reward, having a larger position in the market also opens you up to more risk. As a trader, you need to find the perfect balance of pressing the trade while not pressing your luck.

There are a few ways to achieve this:

 

Pick your battles carefully when Pyramiding

You may find that as time wears on, you're left with a large portion (>2% of total equity) in a single trade. The tactic of adding exposure will generally make for a "short" pyramid, which typically won't grow over 2.5% of overall equity. This Pyramiding tactic ensures you're exposed to additional upside while minimising downside to a level with which you're comfortable.

Here are a few things to be wary of:

Final Thoughts on Pyramiding

Remember always to start small and slowly. There's no need to rush in. Experiment with pyramiding until you're comfortable with your approach. Always remember the two key elements to consider:

  1. Resist the temptation to take profit early when the opportunity arises. Sometimes it's best to sit on an existing trade.
  2. Be wary of adding to your trade at "worse" levels. Trends will always end at a certain point, so you don't want to be pyramiding into an extended, ongoing trend. Look for new trends to pyramid in, which will reduce your overall risk.

Trade Tactically With Liquidity Pools & Stop Orders

Have you ever been stopped out, just to see the price reverse from that very same level? Don’t worry, you’re not alone.

Many traders tend to place their stops in the same types of places, without sufficiently weighing the fact that they are incredibly easy and worthwhile to hit. In the grand scheme of things, these stops end up becoming little more than useful liquidity pools for larger players with the firepower to influence the market’s direction.

What Is Liquidity & Why Is It Important?

If you want to buy EURUSD at 1:1000, you need someone to sell it to you at 1:1000. The same applies in reverse: if you are selling, you need a buyer. This is just the nature of the market.

To keep things simple, saying an asset is “liquid” means it’s easy to find a counterpart. The opposite is “illiquid,” meaning it’s difficult to find a counterpart. Here’s Bill Lipschutz, discussing what liquidity means to him:

"I'm short the dollar and I've misjudged my liquidity in the market, I've tried to hold the market down, but it's not going to work. And I can't buy them back." “All I wanted to do was to make it through to the Tokyo opening at 7 P.M. for the liquidity. If you really have to buy $3 billion, you can do it in Tokyo; you can't do it in the afternoon market in New York - you can't even do it on a normal day, let alone on a day when major news is out.”

– Bill Lipschutz, New Market Wizards.

"Liquidity pools" are levels at which price frequently "makes a decision" as many orders hit the market. They are, so to speak, intersections of orders. This helps with managing open trades, initiating new trades, and adjusting stop losses.

While it’s impossible to avoid losses in the market, it is important to understand the where and why of the market’s reaction.

How To Avoid Dumb Mistakes

The first order of business when talking about stops is to make sure we aren’t placing them too close to the market. Otherwise, we risk getting stopped out too frequently on volatility alone. Here are some reasons why traders get stopped out:

We want to avoid getting stopped out for the last two reasons. If we can eliminate obvious mistakes and understand why we are losing, then at least we’re losing intelligently.

This is already a big step ahead of many traders: especially those who don't know why they are losing in the first place. There are a few things you can do to avoid those unnecessary losses:

  1. Do not place your stop loss 1 pip below the most recent swing low, despite trading with the trend.

The market does not work off precise levels and exact prices. Levels can often be better thought of as “zones,” extending 10-20 pips around a given price point. Depending on the pair in question, and your broker, you’re already looking at a few pips of variance just in terms of spread.

Furthermore, it’s quite common for professional and retail traders alike to use swing highs/lows as logical places to place stops and/or reversal orders.

So, depending on the liquidity available in a given “zone”, the price can dip into the zone, find orders, and get rejected. In the case above, we would get stopped out of our trade, right where we should be looking for clues on continuation or rejection.

  1. Do not place your stop too close to the market

Liquidity is often found on either side of the Asian Range. As such, any trade taken in a range-bound situation should have a stop 15-20 pips outside the range barriers. This helps prevent being stopped out as a natural by-product of the market’s search for liquidity, or just pure volatility.

  1. Do not trade unless you have a logical and tested plan

This is possibly the worst mistake in the book. Attempting to trade without a sturdy plan in place will make you vulnerable. There are too many things the markets can throw at you. If you fail to prepare, prepare to fail.

Order Flow Intersections

We previously talked about liquidity pools as intersections of orders. Let’s now return to the point with some more context under our belt.

Common retail traders don’t usually have to think about liquidity. The market can easily absorb orders of up to $10m. This is far above the sizes they will trade, often even with high leverage.

Traders who trade above this size find liquidity to be a very real issue. They cannot think about the markets like common retail traders. Instead, they need to factor in where and how they are going to deploy their strategy. They need liquidity to deploy their bets without moving the market and without being detected. They also need to have a clear idea of where they will be able to exit, regardless of whether the trade ends up being successful or not.

Large traders (think big funds and Central Banks) cannot simply accumulate or distribute a large position whenever and wherever they wish. Instead, they must look for those places where liquidity is aggregating and stops are helping them in an indirect way.

Anybody looking to place a big order has a much safer opportunity to do so quietly. They don’t need to show their hands or influence the market too heavily. They don’t have to look or hope for liquidity if it’s already there.

Wherever stop-loss orders aggregate, there is a 2-way pool of liquidity being created. The traders that get “stopped out” are forced to issue opposite-side orders. They must thus give large traders the possibility to “fade” the stops that accumulate at those levels.

Since people are creatures of habit, they will usually use the same methods for deciding where to place their stops. For example, just below a recent low, or x pips away from market price. As we’ve discussed, those stop orders create liquidity because they issue a market order when they are triggered.

Major swing points on a major chart are the first place to look for liquidity. And they’re also the first places to keep an eye on what happens. Because, following the same logic, if large traders are active at these levels, then at these levels we have the first clues as to what the aggregate market knows and thinks.

  1. If an evident stop level gets broken (hurdled) and price continues in the same direction, that means the flow has become indigestible to the diverse participants and the price structure changes. This is usually driven by a significant event or strong fundamental reason.
  2. If an evident stop level gets faded, (a break, followed by a quick reversal) that means the flow is still in balance and it demonstrates that the fundamentals are still not strong enough to push forward.

 

 

Stop Being Exploited & Start Exploiting The Stops

Don’t get caught with the crowd. Understanding the dynamics of liquidity will help you protect your entries. It’ll also help you understand where on the price map the market is likely to make important decisions.

So, how do you do this?

The key, as with many things in the market, is to keep it simple and subtle.

A Beginner’s Guide to Social Trading

Social trading is a low investment way to trade, making it perfect for beginner traders. Social trading is a method of trading that has rapidly gained popularity following the advent of social media and online trading.

What is social trading?

Social trading essentially works by copying the trades of expert traders. This can be anything from a copy trade, where only a single trade is copied, to mirror trading, where the less experienced trader copies the exact trading activities as the more experienced trader.

However, social trading is not necessarily a good way to trade for everyone. Read below to see the advantages and disadvantages of social trading, and see if it is for you.

Advantages

Disadvantages

Where do I start?

Great, so you’ve decided that social trading is something that you want to try. The next step is to get started. Blackbull Markets is partnered with both ZuluTrade and MyFXBook, two of the most popular social trading platforms. As a result, it is extremely easy to set up an account. Our MetaTrader 4 program is integrated into MyFXBook, giving you unrivalled ease of access.

ZuluTrade allows less experienced traders to follow established traders, or signal providers, who are ranked according to an internal ranking known as “ZuluRank”. This lets you choose the strongest traders to copy from. This, combined with other features such as ZuluGuard, which allows you to stop copying the trades of a signal provider when the make a change in their trading strategy, and Margin-Call-O-Meter, which lets you see when your parameter settings might put your account at risk for a margin call, makes ZuluTrade one of the most innovative social trading platforms, and the reason we have chosen to partner with them. We have also hosted demo trading competitions on ZuluTrade, with the most recent one having a prize pool of $5,000.

For more information, and to open an account if you are an existing client, please contact support@blackbullmarkets.com. ​

5 Tips For Forex Trading With A Full-Time Job

If your aim is to create a second income through forex trading, then you will know the difficulty of fitting trading in around a full-time job. We are all on the verge of a time management crisis. Luckily, with the right approach, the amount of time required to trade can fit easily into a busy schedule.

In this article, we go through five tips to help get you started. But first, it is important to be clear on your motivation for trading.

For most people, spending a few hours a week learning to take charge of their financial future should be considered essential. Think of it like getting a master’s degree. You are studying a craft that you will be able to carry with you for the rest of your life. The initial sacrifice of a few hours a week will seem minuscule in the grand scheme of things, and the benefits can be significant.

Truth be told, you need to take control of your own financial future. Nobody else is going to do it for you. Make the commitment and share it with others who will hold you accountable. It is you in the driver’s seat, but an audience will keep you on track. Start small, and if you do not like it, there is no pressure to keep going. With that in mind, let’s get into our top five tips for a trader with a full-time job.

You do not need to watch the markets 24/7

No matter how much you do it, staring at the screen does not make the prices change. Nor do your trades require constant attention. As famous trader Jesse Livermore said, “The money is made in the sitting”.

Look to build a forex trading strategy that is either:

Of course an approach where you monitor the markets more often than that is certainly doable. The key is to know that you can structure your trading around your lifestyle and that it does not have to take up all your time. There is another big benefit to not watching the markets 24/7. By separating yourself from the markets, you avoid making emotionally driven mistakes. Instead, you trade your plan, leaving your orders to enter and exit the market while you are away. This is a big – yet somewhat unappreciated – advantage for the trader with a full-time job.

The crucial role of organisation

A disorganised trader is a bad trader. And needless to say, one of the greatest challenges the trader who is also holding down a full-time job has is to get organised. You want to make sure your forex trading routine is well structured. Have a set list of activities that you conduct each time you go to trade.

This should include (but not be limited to):

How long should each of these activities take? It does not have to take long at all. You need to divide your allotted time amongst each of these activities. If you don’t have time to conduct all these activities, it probably means you are placing too many trades. If that is the case, then cut back to something more manageable.

Focus on your top strategy

One of the challenges traders face is they have too many good ideas for trading strategies. Not only does this result in their best ideas not getting the attention they deserve, but it is also very time-consuming. Instead, be ruthless. Choose only your very best strategies to focus on. This could be your highest quality set-ups or the currency pair where you feel you have the greatest edge.

It could very well be best that you only trade one or two of your favourite currencies. Apply the KISS (Keep It Simple, Stupid) approach, use a simple set of indicators, and don’t overcomplicate things. This will save you a ton of time and keep your trading manageable.

Program a robot (EA) to do your trading

Automating your Forex trading ideas is not as hard as it seems, yet the benefits can be significant.

By using a robot you can:

The good news is you don’t have to program the forex trading strategy yourself. There is a large community of developers that can program your ideas and an even larger number of strategies available that you can pick from. A more recent innovation has been the advent of social trading. Social trading allows you to automatically follow the strategies of other traders around the globe.

You simply connect your account to a social trading provider and then select the strategy you want to follow. You can check out these providers:

Note that there are several factors for you to consider when selecting a forex trader to follow.

Free yourself with alerts

These days trading platforms come complete with alerts that will notify you in a variety of ways.

In your trading platform, you can configure alerts based on:

Alerts can be delivered to your desktop and email. These tools can make your trading life much easier, so be sure to use them.

These alerts can be set in your forex trading platform or you could use a service like TradingView.

What’s next?

It is very easy to find excuses not to make the changes that matter in your life. If you want to be a trader, don’t let them get in your way. Keep your eyes on the prize and take the steps you need to take to see this through. If this requires re-organising or restructuring your life, then do it. Don’t let the excuse of a busy life get to you. If you truly want something, there is always a way.

Start by testing a Demo Account and you can set one up with BlackBull Markets here: old.blackbullmarkets.com/en/demo-account/  and when you are ready, try it out with a small Live Account. We are always here to help, so feel free to contact our friendly support team by phone or email at support@blackbullmarkets.com.

The psychology of placing your first trade

 Getting started in forex trading can be quite intimidating One of the biggest mistakes a new trader can make is by focusing too much on the numbers and as a result, neglecting the importance of trading psychology.

The two main emotions that govern trading are fear and greed. Fear causes a trader to exit a market too early or enter too late in order to avoid a loss, and greed can cause making high risk trades, and trading without doing the necessary research. In order to be a successful trader, you need to learn both discipline, to be able to make trades divorced from your emotional state, but also when to take risks.

Luckily, we at BlackBull Markets are here to help. This guide will go over how to manage your emotions when trading, and how to improve your psychology by making the most of your BlackBull Markets demo account, as well as other helpful tips.

How to make the most of your BlackBull Markets Demo Account

Many traders don’t understand how to use a demo account properly. They use it to spend hours perfecting their trading strategy, only to have it fail miserably in the real world. This is because of two reasons:

1: The impact of spreads and/or slippage is not accurately reflected in a demo account,

  1. The trader’s psychology changes when they shift from demo to live trading.

In order to fix these problems, all you need to do is mix small amounts of live trading into your testing. That way, you can tell if you are getting the results you’re expecting, or if your demo trading is off track.

This method also lets you gain lots of valuable experience. By utilising this method, you will either be partway through constructing a system that works for you, or you’ll find that you don’t actually enjoy trading as much as you thought. And that’s ok, because you won’t have already wasted months in a demo environment.

Use your BlackBull Markets demo account to test your ideas and refine your strategy. Just make sure to go back to live trading every so often to test your ideas on the real market.

How to effectively execute trades: the 6 steps

Placing trades should be a calculated, methodical process. Therefore, your mental state should reflect this and you should be calm, decisive, and committed to your decision. Follow these 6 steps every time you trade.

  1. See the trade. Find the trade that meets your conditions.
  2. Feel good about the trade. It's important to feel good about the trade, otherwise you will have difficulty taking it.
  3. Key in the order. Check your terminal to make sure you haven't made any mistakes.
  4. Execute the trade. Press the button to enter your order.
  5. Double check your position. View your open positions window and make sure the trade is correct.
  6. Fix any errors. If you have made a mistake, quickly fix any errors, even if it means a small loss. Don't hold on and hope. This is critical because you will make mistakes, and it's important to limit their impact.

Visualise yourself performing perfectly

Visualisation techniques are used by professionals in many fields, and can be applied to trading as well. As a trader, create a picture of yourself performing the above steps in your mind calmly and professionally. Then, when it comes to making the actual trade, your subconscious will be working for you and chances are you will perform just as you practiced.

Don’t focus on the result

The only time you should be thinking about the results your trade is in the planning stage. Once you execute the trade, you should divorce yourself from any thoughts of the trade being “right” or “wrong”. You have no control over that.

What you do have control over is the number of mistakes that you make. By focusing on yourself and your strategy, instead of what the market might do, you are limiting your chances of making a mistake. This will greatly benefit you in the long run, even if you find yourself losing trades in the short term, because as you gain experience the results will take care of themselves.

What's Next?

Many forex traders face mental roadblocks when getting started. Don’t be one of them. By combining a mixture of demo and live trading, you get both the benefits of having an risk-free environment where you can practice and experiment with your trading strategy, while at the same time being able to work on your mentality and discipline as well.

Now it’s time to take the advice that you’ve learnt in this guide, and apply it to your BlackBull Markets demo account. You can set one up here at blackbullmarkets.com/en/demo-account/. Our support team is also always here to help, which you can contact either by phone or email at support@blackbullmarkets.com.

18 Handy Resources For Busy Forex Traders

One of the hardest things for any busy trader to do is to get organised. Balancing commitments and keeping up to date with a thousand news sources can be stressful when it never seems to end. Luckily, the solution can be simple.

As a busy forex trader, the key to success is to separate your tasks into different compartments. Once you do that, open each compartment as necessary, but focus on only one thing at a time. If you’re planning, plan at the expense of everything else. If you’re reading the news, read the news like your life depends on it. If you’re trading, trade like a hedge fund manager! If you can find 10 minutes a day to do each of these, you can find success.

Here are some resources that help make your trading life much more efficient:

1. An up-to-the-minute News Source
Want to find out what’s important right now? Head on over to Forex Live for the latest market-moving news.
Resource Link: Forex Live

2. A Daily Market Overview
Stay in tune with the markets with a daily recap.
Resource Link: BlackBull Markets Market Reviews

3. Trade Ideas
Looking for well-constructed trade ideas? Browse through FX Street.
Resource Link: FX Street

4. Macroeconomic Data
Trading economics collates more statistical data on countries than you can shake a stick at.
Resource Link: Trading Economics

5. Stock Market Analysis
Forex traders should be keeping an eye on stocks to determine if the sentiment is risk-on or risk-off. Here’s an easy way to do it.
Resource Link: Weekly Stock Market Recap
You can also access free charts on Stock Charts

6. A Finance-focused Twitter Account
A twitter account directed towards financial news is one of the best and fastest ways to stay up to date.
Resource Link: Set up a Twitter account

7. RSS Reader
Combine all your news and analysis in one spot for easy viewing with the Feedly app on your desktop or iPad. This is a serious time saver!
Resource Link: Feedly RSS reader

8. News Event Calendar
While you don’t always need to follow the news in detail, it’s important to be aware of what upcoming events could impact your position(s). The last thing you want to do is enter a trade right before a volatile news event you did not know about.
Resource Link: BlackBull Markets Economic Calendar

9. Demo Account
Need to get familiar with how the markets work before you risk your trading capital? Get started with a practice demo account.
Sign up here for a free BlackBull Markets Demo Account

10. Pip Value Calculator
It is the amount you trade that determines your returns. Perfect your position sizing with this free calculator.
Resource Link: Pip Value Calculator

11. Trading Session Map
The timing of your trade matters. New York open is a different kettle of fish to lunchtime in Sydney, for instance. Those interested in exploiting volatility can consult a forex session map to discover the ultimate time(s) to trade.
Resource Link: Forex Market Hours

12. Alert System
Taking a break from the markets but worried about what might happen?
Resource Link: Netdania Alert System

13. Free Basic Education
When you are first starting out, it can be tricky to find a good source of basic information about how to trade. Check out Baby Pips, which is one of the more reputable sources. Also, don’t forget BlackBull Markets’ carefully cultivated education section.
Resource Link: Baby Pips Education and Learn to trade Forex with BlackBull Markets

14. Trading Glossary
Wondering what a “One cancels other order” is? No sweat. Head on over to BlackBull Markets’ comprehensive Forex Trading Glossary.
Resource Link: Trading Glossary

15. Trading Guides
Looking to upskill on technical analysis or any number of other topics? Check out BlackBull Markets’ comprehensive collection of free forex guides.
Resource Link: BlackBull Markets Trading Guides

16. Trading Performance Analysis
You know you should be monitoring the performance of your trading system. That’s why this free trading performance analysis tool for MT4 from FX Blue is so helpful.
Resource Link: Trading Performance Analysis Tool

17. Commitment of Traders Report
The Commitment of Traders report provides the current speculative positioning in the futures market, which can help decide if a market is overbought or oversold.
Resource Link: Commitment of Traders Report

18. Account Manager
Finally, as a client with BlackBull Markets, you’ll have unlimited access to our seasoned team of expert account managers who are available to assist you every step of the way in your journey as a trader with BlackBull Markets.

What’s Next?
By taking a mindful and dedicated approach to do a lot in a small space of time, we can greatly enhance our productivity.
Ten minutes of intense study is much better than a day’s worth of wishing you could focus properly on the news. Fifteen minutes of solid planning is priceless when the alternative is wishing you could find the time.
Simply be aware of what you need to do when and then give it your full attention when you do it. It takes some getting used to, but if you do it properly, you’ll never look back.

Is There Such Thing as the Perfect Trading Strategy?

Every trader has thought about coming up with the perfect trading strategy. Many spend night after night trying to produce a strategy with a win rate over 90%, and after planning and tweaking it in a demo environment, eventually try to take it live.

However, what actually ends up happening is that things might start off well for the first few trades, but eventually they get stopped out. And then instead of taking the loss and moving on, they go back to the drawing board, thinking that the strategy is at fault. This continues on and on, and can eventually become enough to drive any trader insane.

Here’s the thing: the perfect trading strategy does not exist. If it did, then everyone would be using it, right? Unfortunately, many choose to ignore this fact and continue chasing a pointless path.

Solid Setups

While there is no way to have a perfect trading strategy because of how unpredictable the market is, the most important thing to learn is to understand the strategy that you are implementing, and what impact it will have.

Here are some solid setups to consider:

  1. Volatility Breakouts

This is a strong and reliable strategy that is popular and utilised by many experienced traders. It revolves around locating areas of shallow consolidation where volatility drops, and then playing the breakout of the tight range that has developed.

While this is by no means a perfect strategy, it is an option you can consider.

However there are nevertheless factors to watch out for:

They also don’t provide the following details:

Unfortunately, many trigger finger traders find these considerations boring. So what usually occurs is this:

  1. They buy and sell volatility breakouts.
  2. Having run out of them, they then search the markets for any situation that resembles that setup
  3. They risk 5% or more on each setup
  4. They lose a lot of money
  5. They keep trading to try and win back the money until they have none left
  1. Trend Following

This is a setup that revolves around cutting your losses when required, and letting profits run. Strategies include playing pullbacks that don’t violate the structure of a trend.

However, patience is key to the success of this strategy. For example:

You identify a new price trend starting in February 2020. You have a plan in place to quickly highlight good pullbacks that would enable you to engage the trend. The daily peak structure is in place so you make a move to “nail the entry”. Then things start to turn sour as you identify several “trouble” zones. You lose course of your initial strategy to play a pullback in a daily trend and end up engaging in a potential longer term trade.

The above example shows why its crucial to watch out for the following:

A common misconception amongst traders is thinking that being patient simply means waiting for the perfect price. In this instance, perfect is determined by a price pattern or a certain indicator. Unfortunately, the perfect price is nearly impossible to determine and therefore we cant stalk perfect entries.

Certain “all in, all out” strategies may work under certain conditions, but when it comes to trend trading, you’re better off looking to instead scale in and scale out. Sitting and waiting for the perfect entry will result in missing out on other golden opportunities.

Another thing to consider is confusing timelines. When trend trading, it’s recommended that traders select one timeframe to view the trend in question. A daily chart is a good example. This means that when the daily is pulling back, you’re able to drop into lower timeframes to attempt a better entry.

Confusing your timeframes and trends will only negatively affect your performance.

Embrace Imperfection

By now you should understand that by trying to create a “perfect” trading strategy, you move away from the core concept of trading itself.

As a trader you will always experience losses, but its how you manage and handle them that is important. What you should do is cut your losses as soon as you can, and take your profits as far as you can. Even if you make one unsuccessful trade, if your overall strategy is solid, your overall balance will be positive.

By staying flexible and being open to making adjustments, you will be much more confident and ready to adapt when shifts inevitably do happen.

If you would like to learn more about trading, we have guides which we publish every month here: https://blackbullmarkets.com//en/support/trading-guides, as well as daily market reviews, which are available here: https://blackbullmarkets.com//en/market-reviews