A crucial component in any traders arsenal is the ability to confidently experiment with their forex strategy. Not only will it cure any potential boredom that goes hand-in-hand with carrying out the same strategy day in day out – but, ultimately, it will help you become a more experienced, well-rounded forex trader well-equipped to tackle a variety of circumstances that the often-turbulent market may throw your way.
In this blog post, therefore, we’re identifying the ways in which you can diversify your trading career through expanding your knowledge of the market and exploring new forex strategies to the potential benefit of your profitability and trading success.
Where can I experiment?
It goes without saying that altering your tried and tested forex strategy isn’t something you should do recklessly and without caution. You strategy is inherently valuable and, for many traders, is what they rely on as an income source. Therefore, making changes to it can seriously impact your trading and profitability, causing potentially negative impacts to your success rate if not carried out effectively.
This is when a demo trading account comes in handy. Typically marketed to those wide-eyed traders just starting out in the industry, a demo account allows you to practice and tweak your strategy, all while eliminating the potential of losing any money. However, it’s important to remember that while the analysis and charts are the same, demo accounts can’t ever truly replicate live trading – so tread with caution when it comes to adapting your new strategy to suit the dynamic trading practised on the live market.
Practise trial and error
Actively embracing intentional periods of trial and error is crucial to implementing successful outcomes into your forex strategy – remembering all the while that it’s unlikely that any trader has hit the nail on the head first time round when it comes to experimenting new ways to trade.
It’s important to find scenarios that don’t fit the changes you’ve made to your strategy and identify what can be done to rectify these instances. When testing your changes, ask yourself; when is this change the strongest and when is it the weakest, and how is it best utilised to aid my goals? These questions all require trial and error and are likely to lead you to further investigations, adapting your strategy safe in the knowledge that you know and understand how it could impact your trading outcomes.
Don’t forget about data
At any point, when deciding to try something new with your strategy, you need to ensure you’re logging your results and documenting any (and all) outcomes that occur during your experiments. After all, how are you able to make a measured decision of how effective your new changes are without any concrete data and evidence to analyse?
However, just because you’ve recorded 20 trades doesn’t mean that, upon checking the data and deciding it’s majority positive, you should then implement this change into your regular forex trading strategy. Make sure you have a bigger sample of data to consult before making any decisions, placing 100 trades in a demo account for example, before acting on the outcomes.
Knowing how to trade and having an appropriate level of experience behind you before taking the plunge and testing out new forex strategies is crucial to the potential success of your new strategy. For more information and to learn forex trading strategies in more depth, no matter if you’re a beginner or forex veteran, why not join us at one of our free forex workshops where our award-winning professionals are ready to guide you through all things forex?