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You’ve chosen a market and a trading style. You have a broker and a demo account. Now you need a Profitable Trading Strategy.
Ironically, finding a good Strategy isn’t all that hard.
The hard part is sticking to it, trading it consistently, and remaining disciplined.
All great traders will tell you: Success in trading will be defined by your mental ability to manage losing periods while remaining consistent in applying your strategy.
How to Decide What Strategy you’re Looking for?
Before you start searching all over the place to find profitable strategies, you need to go back to your initial choices.
What asset have you decided to trade, over what time horizon ? (Eg. Forex, swing trading).
Remember, this is one of the first steps we took. You made these choices depending on your goals, your initial funds and your personality. If you’re not clear on that, go back to Steps 1 and 2.
Keep in mind that success will come from finding good strategies and making them your own.
Three things you need to check to make sure you have the right Strategy
- Backtest the Strategy (check out The Resources page for some backtesting tools)
- Trade it on a demo account for a reasonable period (4 to 8 weeks)
- Monitor your results closely, and make the Strategy your own.
That way, you will know what to expect and be prepared.
For example, let’s say you discover that your strategy has losing periods that can generate drawdowns of around 5 or 10%. Then you know that trading it successfully means sitting out these periods without panicking or skipping to another strategy.
This is fundamental. All strategies have losing streaks, and being able to remain confident in your strategy when it loses is the key to success.
Now all you have to do is to find strategies from established traders and make them your own. But first, let me explain why the Trader counts more than the Strategy.
Why different people get different results from the exact same Strategy?
A lot of strategies can be profitable, if traded consistently.
But studies have shown that if you provide the exact same strategy to a Group of people, they will all trade it differently, and with different outcomes.
What the Turtle Experiment taught us
This is the true story behind Wall Street legend Richard Dennis, his disciples, the Turtles, and the trading techniques that made them millionaires.
What happens when ordinary people are taught a system to make extraordinary money?
Richard Dennis made a fortune on Wall Street by investing according to a few simple rules. Convinced that great trading was a skill that could be taught to anyone, he made a bet with his partner and ran a classified ad in the Wall Street Journal looking for novices to train.
His recruits, later known as the Turtles, had anything but traditional Wall Street backgrounds; they included a professional blackjack player, a pianist, and a fantasy game designer.
For two weeks, Dennis taught them his investment rules and philosophy, and set them loose to start trading, each with a million dollars of his money.
By the time the experiment ended, Dennis had made a hundred million dollars from his Turtles and created one killer Wall Street legend.
If you want to know more about this incredible experiment, check out The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires
The lesson from that is that with the exact same Strategy, some traders will be successful, but others won’t.
Psychology makes all the difference. We all react differently to loss, gain, fear and greed. And for that reason, we will get different results from the exact same Strategy.
Ok, so now let’s see where you can find some good Strategies.
The best sources for finding profitable strategies
Over the years I have come across a number of very good traders. The links to their strategies are here below. I recommend you check them one by one, and get a feel for them.
Forex Trading Strategies
- Linda Bradfor Raschke’s book « Street Smart » is a very good source of trading strategies. Check out the « Holy grail », you can also research it online, it has been quite widely publicized;
- Karen Peloille’s Ichimoku strategies in her book « Trading with Ichimoku »: to me some of the best strategies available
- Jarratt Davis’ Forex news trading strategies
- Kim Krompass’s unique trading strategy
- Chaos Trader 63’s Ichimoku strategies at FX At One Glance
Other types of strategies (mixed, Forex, stocks,…)
- Warrior Trading’s strategies for trading Bull Flags and Flat top breakouts. Here is a very good video where they are explained
- Stock picks from the Contrarian Outlook website, edited by Brett Owens, it has given me loads of high yielding opportunities and I highly recommend the free articles along with the monthly paid namesake newsletter, it is brilliant
- My own Simplified Ichimoku strategy
- Strategies from the traders at SMB Capital, a highly reputed Proprietary Trading firm fiunded by Mike Bellafiore. Check their Youtube Channel
Crypto Trading Strategies
- My own Long-Term Bitcoin strategy
If you’re specifically interested in Forex, I also have this list of 17 very good Forex Traders you can emulate, it contains links to many other profitable strategies.
So, I hope you can find some good strategies in the above.
I’ll keep adding more as we go, but you already have a good choice of solid strategies that you can start testing.
Remember: do your homework, backtest, demo, then go live. Make these strategies your own, and stay disciplined.
Trading is a journey, it takes time. Most successful investors are patient people. So don’t rush it.
There’s no easy get rich quick scheme. Making it at as successful trader will take a lot of dedication and discipline. But it is worth it, a million times.
If you have moderate expectations and favor a hands off approach, go for automated trading (Robo-Advisors).
Otherwise, follow the steps I have listed here, and you will stand a good chance to start hitting some of your targets.
If this Guide has been helpful, or if you feel some additions would be useful, drop a comment below.
Safe trading to all.