The Most Overlooked Trading Strategy: Sticking to the Strategy

Are you someone who has traded almost every forex strategy, method, and EA in existence... and yet you continue to lose money hand over fist? If it seems similar, I can assure you one thing: you are not alone. Most merchants of all skill levels were present.

What may surprise you is that it may not be the strategy that is failing you, but rather you.

You see, certain strategies work part of the time, while others work the majority of the time...

However, no strategy works 100% of the time. The capacity to sit through the downturn phase of any strategy will make or break any novice to the market on their path to being consistently successful.

The irony is that the first strategy you probably traded in your trading career is unlikely to perform as well as the strategy you traded yesterday. Except you've most likely moved on from both. Perhaps you became frustrated while waiting for the returns you had hoped or anticipated this trading strategy would offer. Perhaps you just did not want to deal with the agony of losing any more money.

But what if you discovered that all of the rule-based forex strategies available work? You'd probably be a touch pessimistic. However, if you only trade when your strategy instructs you to, in a mechanical manner, you will effectively eliminate the noise and anomalies that occur in the market.

After all, you should only – and I mean only — trade when you have a good technical setup that meets your entry criteria, right? Remember that no strategy consistently succeeds and generates profits. You can simply determine a strategy's success rate by observing how it performed over a certain time period or number of trades (eg. A sample of 20 trades).

However, as previously said, what makes a trader successful in trading their chosen forex strategy is their capacity to stick with it - even when faced with hardship.

However, for many market newcomers, this is little more than an uncomfortable fact. Many novices trade for the wrong reasons, and their expectations are often unsustainable. They often have an emotional tie to the result of the trade (ie; the euphoria of making money from a winning trade Vs the pain of giving money away to the market from a losing trade). As a result, in their quest for the silver bullet, they flutter from strategy to strategy like a dog chasing his tail.

Suffice it to say, they don't comprehend variance, which states that the frequency of both winning and losing trades is random. The inexperienced trader may have unintentionally begun trading a very lucrative strategy at the outset of its loss period. After two or three failed trades, they will move on to the "next best thing" — anything that will save them from losing additional money... Only to learn that by doing so, they have removed themselves from the flow of opportunity and from the running to profit from a streak of profitable trades.

Does this ring a bell?

Sure enough, their equity curve for that strategy may seem negative in comparison to someone else's extremely lucrative curve who has traded that strategy for months or years.

Summary

By adhering to a single trading strategy in "illness and in riches," you will maintain yourself in the opportunity flow and the resulting frequency of wins and losses.

Remember that winning and losing trades from any strategy are analogous to waiting for a city bus; sometimes they all come at the same time or there is a considerable delay.

It is our responsibility as professional traders to remain in this flow while observing the important "make or break" abilities of patience and discipline in order to create a long-term success of it.

Simply choose a strategy that fits your personality and trading availability and give it a fair hearing over a reasonable amount of time.