Building Your Own Forex Trading Strategy
Great! If you have reached this part of this guide and if you did not skip any part, you will have all the knowledge you need to become a highly profitable trader
As discussed, there are 3 important methods to develop your profitable trading strategy. These are,
- Candlestick Patterns
- Chart Patterns
- Technical Indicators
But what do you use? Simply the things you really understand. Also, your strategy should be based on the questions below. Make sure to answer all of them.
![Building Your Own Strategy, Back Testing and Tips 2 tradingstrategy1](https://axlestreet.com/wp-content/uploads/2022/08/tradingstrategy1-1024x589.png)
Do you prefer trader reversals? If so, you need to master reversal candlestick patterns.
![Building Your Own Strategy, Back Testing and Tips 3 tradingstrategy2](https://axlestreet.com/wp-content/uploads/2022/08/tradingstrategy2-1024x473.png)
Do you prefer to trade with the trend? If so, you need to master continuation patterns.
![Building Your Own Strategy, Back Testing and Tips 4 tradingstrategy3](https://axlestreet.com/wp-content/uploads/2022/08/tradingstrategy3-1024x473.png)
Do you prefer to trade the breakout? If so, you need to master breakout patterns.
![Building Your Own Strategy, Back Testing and Tips 5 breakout2](https://axlestreet.com/wp-content/uploads/2023/02/breakout2-1024x476.png)
Of course, you can trade multiple strategies. You can trade using a trend trading strategy in combination with a reversal strategy.
Here is our recommendation. Choose two strategies and 1 technical indicator and then back-test it. We will talk more about backtesting in the next section.
Back Testing and Why it is Important
Backtesting is simply taking your forex trading strategy and testing it in the market with its previous data. This is very important to do if you want to become a profitable trader. Also, this is a great way to test your trading strategy and build confidence in it. There are several software that you can use for backtesting. You can backtest in MT5, trading view, or use popular backtesting software like forex tester. Forex tester is the best backtesting software out there. We recommend you get it.
But if you don’t want to pay for the forex tester, you can always backtest on MetaTrader 4 or 5 for free. Of course, it’s not as good as the forex tester for backtesting but you can still make it work. To backtest on MetaTrader, disable the “Scroll to the end ” button as shown below (Circled in yellow).
![Building Your Own Strategy, Back Testing and Tips 6 back1](https://axlestreet.com/wp-content/uploads/2022/08/back1-1024x178.png)
Then, go back to the charts for your desired year. Then you can press the function key + F12 key to move your charts forward one candlestick at a time. The two charts below show before pressing the F12 key and after you pressed the F12 key.
![Building Your Own Strategy, Back Testing and Tips 7 back2](https://axlestreet.com/wp-content/uploads/2022/08/back2-1024x473.png)
![Building Your Own Strategy, Back Testing and Tips 8 back3](https://axlestreet.com/wp-content/uploads/2022/08/back3-1024x473.png)
Do you really want to be a successful trader? If you really want to, take all the strategies you learn in this guide 1 by 1 and trade using each strategy for at least 5 years going back in the chart 1 candlestick at a time.
This will help you choose the best strategy for you and master that strategy. Also, make sure to journal your backtests in a trading journal so you can easily analyze their profitability.
Tips and Advice
Forex trading is simple but on easy. The key to becoming a successful trader is to have 1-2 really good strategies, proper risk management, and the right mindset. If you have all these 3 things you will become successful.
![Building Your Own Strategy, Back Testing and Tips 9 advancedtips1](https://axlestreet.com/wp-content/uploads/2022/08/advancedtips1-1024x473.png)
4 Tips from Pro Traders
1. Do not risk too much money per trade. It is advisable that you risk 1-2% of your capital for each trade.
2. Always track your trades in your trading journal. It will show you how profitable is your trading strategy.
3. Plan your trading goals. Stick to your plan.
4. Treat trading as a business. Commit at least 2 hours per day to trade.
![Building Your Own Strategy, Back Testing and Tips 10 advancedtips2](https://axlestreet.com/wp-content/uploads/2022/08/advancedtips2-1024x473.png)