Sure, traders can pick many strategies from books, trainings, and crash courses. But have you heard of do-it-yourself trading strategies? Creating your own strategies can be an enjoyable activity. Before jumping to DIY trading techniques, take a deep breath, gather data and reading references, get a pen and a paper, and read this article.

To get started, one needs to discern whether he is a day trader, an investor, or a swing trader. You can do so by limiting the chart options. Choose a time frame which best suits your needs. Next, you need to decide on the market you wish to focus on. Whether it is forex, stocks, or futures, select the type of trading you desire to do.

You also need to make and test strategies. It is way easier to stick to a trading plan with an effective technique or two since you are confident enough of your masterpiece. Study the indicators such as candlestick patterns, chart patterns, and other patterns to see if something has triggered price movements. Look back and observe if the same thing surfaced for other movements on the chart upon finding the right strategies. From there, you can come up with a set of rules for entering and exiting the market, as well as the stops to be placed on future trades.

Forget not to examine price movement after each entry to find out where to place stops. Look for profitable exit points as well when analyzing movements. Same rule applies here: look at the indicators, Fibonacci levels, or other tactics to maximize profits and minimize losses.

Speaking of tactics, you can look for some which work over short time periods, depending on the frequency of searching techniques. Short-term anomalies, in most cases, enable the trader to generate consistent profits. Monitor all your strategies. Write all of these down in a journal or notebook and integrate those in a trading plan.

A few trading reminders:

  • There’s no such thing as forever when it comes to strategies. Such techniques fall in and out of profitability. For instance, if a particular strategy has worked for the past few months or decades, it may or may work the next trading day.
  • Usage historical data and looking for a strategy won’t guarantee profits in any market, pressing many traders to not backtest their techniques. But it really pays to test something on real data.
  • No need to find strategies that work all the time. No technique works that way, anyway.
  • Be confident enough to do trading.