WEBVTT 0 00:09.660 --> 00:11.560 I want to ask you a question. 1 00:11.780 --> 00:18.840 What do you think it has been the most important concept in this course? I can already imagine you saying: 2 00:18.870 --> 00:25.510 reading the market with the candlesticks or how to place Stop-Loss and take profit correctly. 3 00:25.800 --> 00:29.280 But in my opinion the answer is another one. 4 00:29.490 --> 00:37.350 The most important concept is that there is not a standard situation that always happens on the market. 5 00:37.350 --> 00:42.960 Every scenario is different and needs to be analyzed on its own. 6 00:42.960 --> 00:49.680 This is the reason why this lecture is called How to Build a trading strategy and not how to build a 7 00:49.680 --> 00:51.660 trading system. 8 00:51.670 --> 00:55.380 You want to have a strategy to consider some entries 9 00:55.440 --> 01:02.220 when you analyze the chart, but you don't want to have a system that is made by a bunch of rules that 10 01:02.220 --> 01:07.280 you always apply regardless what the market is really saying. 11 01:07.290 --> 01:12.390 Having said that, you are three steps away from building your own strategy. 12 01:12.720 --> 01:17.160 Step one is: choose the correct timeframe for you. 13 01:17.220 --> 01:24.150 You can be a scalper, you can be a day trader, you can be a swing trader or you can be a position trader. 14 01:24.150 --> 01:25.840 It doesn't matter. 15 01:25.860 --> 01:30.840 You are the only one that can decide which time frame suits you better. 16 01:30.930 --> 01:37.020 We have already talked about the timeframe so I'm not going any further and we can jump to the second 17 01:37.020 --> 01:38.170 step. 18 01:38.400 --> 01:43.080 The second step is choosing your weapons to face the markets. 19 01:43.080 --> 01:50.070 We have seen everything possible about the candlesticks. So candlestick patterns will be a huge weapon 20 01:50.070 --> 01:53.940 by your side to win the war against the market. 21 01:53.940 --> 01:59.160 Do you want to have something more on your chart to filter the signals? 22 01:59.540 --> 02:01.240 Well, sure, you can do it. 23 02:01.260 --> 02:02.160 Go on. 24 02:02.220 --> 02:09.510 We have seen the moving average, we have seen the relative strength index, we have also analyzed different 25 02:09.510 --> 02:11.860 settings for these indicators. 26 02:12.150 --> 02:16.370 A common mistake is to think that the more, the better 27 02:16.410 --> 02:25.260 when choosing how many indicators to use. Do you think that something like this is better than something 28 02:25.260 --> 02:26.850 like this? 29 02:27.150 --> 02:34.380 You should use whatever can help you to analyze the market, but this doesn't necessarily mean that you 30 02:34.380 --> 02:37.260 will have a better understanding of the market 31 02:37.350 --> 02:44.860 if you use more indicators. There are many expert traders that only use the candlesticks to trade. 32 02:45.000 --> 02:53.010 They don't use any other tool. It's just a matter of finding out what is the best set up for you. 33 02:53.010 --> 02:57.830 Step three is: write down your money management rules. 34 02:57.930 --> 03:05.040 For example, I never risk more than 1 percent per trade and I never choose a risk to reward below one to 35 03:05.040 --> 03:06.420 one. 36 03:06.420 --> 03:12.570 How you manage your account and your risk plays a fundamental part in your strategy. 37 03:12.570 --> 03:19.880 So make sure to spend time to define your rules. So you've got three steps to build your own strategy 38 03:19.890 --> 03:25.170 and honestly you don't need to be Einstein to come out with a strategy that works. 39 03:25.170 --> 03:27.560 But then, how to proceed? 40 03:27.840 --> 03:31.740 Are you going to invest $50,000 on this strategy? 41 03:31.740 --> 03:33.440 Of course not. 42 03:33.690 --> 03:36.660 You need to test your trading strategy. 43 03:36.660 --> 03:43.190 The easiest way is to open your Meta trader, go back in time with your chart and then move the chart 44 03:43.200 --> 03:44.120 forward, 45 03:44.250 --> 03:49.800 starting to analyze all the positions that you would have taken in the past. 46 03:49.800 --> 03:53.720 Record your results and be honest with yourself. 47 03:53.950 --> 04:01.170 At the end, when you have your final results, if you're happy with that, you can go on and use that strategy 48 04:01.170 --> 04:04.750 with a Demo account for a couple of months. 49 04:04.920 --> 04:10.650 Trading with the demo account will put you in a different situation because now you're dealing with 50 04:10.680 --> 04:12.630 a market that is moving. 51 04:12.990 --> 04:19.050 If your results are still good after a couple of months of demo trading, then you can start with a 52 04:19.050 --> 04:20.100 real account.