How to calibrate your Forex trading strategy

The intermediate traders always think they know all the details of the market. They stick to the basic rules and start making decent profit. But things start to change when the market starts changing in nature. Eventually, the intermediate traders blame the Forex market. You need to learn to calibrate your trading strategy from time to time. Even the pro-Singaporean trader needs to adjust their trading strategy so that they can keep pace with the dynamic nature of this market. Though it’s an advanced term, after reading this article, you will get a clear idea about this process.

When do you need to calibrate?

Knowing about the key time to calibrate your trading strategy is very crucial to your success. Most of the time, it becomes really hard for naïve traders to make a consistent profit. But after learning about the definitive trading method, they start making a consistent profit without losing too much money. However, things start to fall apart when the trend changes or the price start to exhibit different movement. This is when the traders start losing too many trades. If you lose more than 10 trades in a row, it’s high time you revise your trading strategy to bring some positive change to your trading system.

Stop trading with real money

As soon as you feel the urge to change your trading strategy, you should start using the demo account. In the demo account, you can find the faults for which you are failing to make a consistent profit. Those who think demo accounts are nothing but a waste of time is making a big mistake. Even the top traders at the Saxo bank group often use the demo account to fine-tune their trading strategy. By doing so, you can easily cut down the unnecessary losses at trading. Before you start dealing with the major change in your trading system, you should have the skills to find the faults. Unless you know your mistakes, there is no way you can bring change to your existing trading strategy.

Back testing the new strategy

Once you bring some major changes to your trading strategy, you need to back test the trading method. Back testing is the most effective way by which you can improve your trade execution process. If the results of back testing satisfy you, you can start trading the real market. However, you need to start using the advanced risk management plan to manage the risk exposure at trading. Instead of taking 3-5% risk, you should take less than 1% risk so that you can gain confidence in this market. Once you gain confidence, start trading the market with the traditional money management rules.

Learn to use the major news

Avoiding the major news is another common reason for which the traders fail to make money. You can easily make money based on the technical data during the stable market condition. As soon as the market becomes extremely volatile it will be really hard to find the best possible trades to place the trades. Things might be a little challenging, but learning to deal with the major news is a very easy task. First of all, learn about the low impact news. Once you have precise knowledge of that sector, you should start dealing with the medium and high impact news. Based on the news data, you should synchronize your trading strategy.

Conclusion

Success depends on the trader’s skills. If you think trading is the perfect profession, you must think like a professional investor. Learning about basic things and expecting big profits with a small capital is not going to work. Believe in yourself and set realistic goals in this industry. By doing so you can reduce the risk exposure and make your trading process much easier. Always consider trading as your business.