Professional traders love to stay tuned with the market. They always revise their trading strategy on a regular basis since they know it will help them to stay updated with the market. As a novice trader, you might think you can trade this market with the same old trading method. Follow this technique and within a few months, you will feel the necessity to bring some minor changes to your trading method. This is nothing but syncing yourself to the changes in the market.
Changing or revising your trading strategy is not an easy task. You have to follow some rules and maintain strong precautions. A slight deviation can result in big losses. Now we are going to give you some powerful tips which will help you to revise your trading strategy in a better way.
Identify your weakness
Before you bring any change to your system, you must feel the necessity that your system needs a revision. Once you feel that, you have to identify the weakness in your system. Without identifying the weakness in the system, it is going to be a tough task to find the best deals in the market. Once you do that, you should write down flaws in your trading system. But do not think that you have to keep your strong factor integrated into the system. For instance, if you intend to trade in a ranging market, there is no reason to rely on the trend tool. In fact, that trend line tool is going to act as a weakness for your trading system.
Testing in the paper trading account
You need to bring the changes in your system by using the paper trading account. If you don’t use a paper trading account, you will expose yourself to high risk. Even successful traders rely on demo trading account when bringing change to their system. Never try to alter the complete trading system. Based on your notes, you should bring changes one by one. Once you are done with the changes, you should test the efficiency of the system. Demo trade for few weeks and assess your comfort level. If you feel confident with your new Forex trading system, you might give it a try in the real account.
Trading in the real account
After revising your trading strategy, starting to trade with real money is going to be a very big challenge. Things will seem a bit different and it’s normal. You have to adapt yourself to the market changes and make yourself skilled in using your trading system. During the first few months, you should trade with less than 1% risk. But if you gain back your confidence within a week, you may start using your regular risk management rule. However, it would be wise not to move back to your regular risk management rule till you execute 20 trades in the market.
Every new trading system has a different recovery factor. No one can win all trades even though he might have strong analytical knowledge. The market is not designed in such a way. So, you have to know the recovery factor for your trading system. This means you should be confident enough that your trading system is capable of recovering the losses. Though it is going to be a tough task, you can ease the process by trading the market with a high risk to reward ratio. Once you do that, you will not be stressed even after losing few trades in a row.
Always trade with the best broker
The revised trading strategy is not going to work unless you chose your broker wisely. So, chose your broker based on their trading tools and offered service. They must have strong regulations and a strong record in the trading industry. Unless you consider this issue, there is no way you are going to succeed in the long run.