So you are looking for the top trading strategies, does the strategy really matter, well yes you need a strategy with an edge if you want to make a profit but what else makes for a top trading strategy?
In this post, I will look at some important factors that make the top trading strategies. There are 1000s of strategies out there that work, and the strategy is only a small part of being a successful trader, the trick is finding the right one for you.
Why Do I Need a Strategy?
Like I have mentioned a strategy is only a small but important part of your overall trading journey to success. Don’t get confused and think that your strategy is your Trading Plan. Your strategy will form part of your trading plan.
You will most likely end up with a few strategies for varied market conditions as not all strategies work for all the market conditions. I use 3 strategies, one for a trending market, one for a consolidating or sideways market and a 3rd for a fast-moving market that works well on lower time frames.
I only use Technical Analysis for my strategies, but the number one reason for a strategy is to give you an edge in the market. Trading is really only like playing a game of probabilities, and you want to stack the odds in your favour. You have no control over the markets, and they can move in any way at any time, all a good strategy does is give you a higher probability of success, it Does NOT guarantee it.
What is a Trading Strategy?
A trading strategy is a method of buying and selling in markets based on predefined rules used to make trading decisions. Your strategy will give you an edge in the market if you haven’t got an edge, you are just gambling.
What Strategy for Me?
Suppose you do a google search for top trading strategies you find hundreds of Gurus promoting their latest, greatest, best-winning strategy. The truth is what works for me may not work for you, like I said you only need to have a slight edge in the market with any strategy, how you implement it and your Trading Psychology plays a bigger part in your success.
You must find a strategy that suits the way you want to trade, so first, you need to ask yourself a few questions and work out what sort of trader you will be. You need to establish how much time you want to spend trading, are you going to spend a lot and scalp the market being full-time day trader or do you want to spend just a few hours a week and use a more long term strategy?
Typically, a strategy will suit certain market conditions, a strategy will rarely work well on all time frames and market conditions, that is why I use three. Some strategies will work across various market conditions but still tend to work better on certain ones. A person who scalps the market on lower time frames will most likely use a different strategy than someone who trades longer time frames like daily or weekly.
As far as I am concerned, the top trading strategies should be easy to trade as well. Use the KISS principle, you know – Keep It Simple Stupid. It’s no good having a strategy that is too hard or subjective to use, and a good strategy should be simple to interpret and easy to implement. The strategies I use require 2 moving averages, the MACD and the only other tool I use is the Fibonacci retracement. I use a checklist, and when the market conditions are met for my strategy, I tick the box unless I can tick all 8 boxes I DO NOT have a trade – Simple.
Testing your Strategy
So how do you know if you have a good strategy?…………… Test it!
Yes, backtesting, you can use free charts like trading view and go and test your strategy. I can’t stress how important this is. It will give you confidence in the strategy, which will play a massive part in your success. Trading Psychology is one of the Most important factors in trading success, and backtesting your strategy will greatly help with this.
All you need to do is implement your strategy on the charts and record your results, but make it as real as possible use the replay feature in Tradingview if you have to but record all your results. I usually go back and test at least 100 trades on each coin, that gives me a good idea of what to expect, things like how many losses in a row can I expect and make sure you record your profit and loss amounts. It might sound strange at first, but you can have a strategy that wins less than 50% but still makes good profits because your wins are bigger than your losses.
Let me Show You
Just say your strategy only wins 40% of the time, so out of 100 trades you have 60 losses and 40 wins, now if your Risk / Reward ratio is 1:2 that means that you win twice as much as you lose. OK so let’s say you are risking $100 each trade, with your 60 losses you would have lost $6000 (60 trades X $100 = $6000), but you have won 40 trades, and each trade made $200, so 40 trades X $200 = $8000.
You can see now that the strategy only wins 40% of the time, but it is profitable, in the case above you would be up to $2000, without taking fees into account. I just wanted to show you the importance of researching a strategy and backtesting, so you get your own real results. Just remember any Guru can make big claims about their strategy, but you won’t know if they are real and true until you backtest it yourself. Please do your own backtesting – That is very important don’t just rely on someone else’s results.
Implementing your Strategy
If you have done your backtesting, you will have learnt how to implement your strategy fairly well. Nothing is a substitute for the live market. However, it would help if you had a good idea of how your strategy will work. Now it is just a matter of learning how to place your trades when your strategy conditions are meet and having the right mindset to follow your trading plan.
Just start small with a new strategy when you go live, that way if you do make a mistake (and you will) it is not costly. Once you have mastered placing trades on your strategy in the live market, you can ramp things up. Your strategy will only play a small part in your success; your Trading Psychology and Trading Plan will require more work. Many people give up on a good strategy because they are not following their plan and have the wrong mindset for trading, they will blame the strategy, but in reality, the strategy is good.
The Strategies I Use
I use 3 different strategies, I use them because they are simple, they work across different markets and time frames, this gives me a lot of options. I use different strategies for different market conditions. If a market is trending, I use the Cradle Zone strategy, consolidating markets I use the Breakout Strategy, and for fast-moving markets, I use the Fibonacci Breakout strategy.
Although I use these strategies only on crypto, they also work on other markets like FX. If the crypto market closed tomorrow for some unknown reason, I would start using these 3 strategies on a different market. If you want to look at these strategies and start learning the basics of them for free, you can start with the Free Trading Course if you like them you can go on and purchase the full strategies and Become a Master.
My Final Thoughts on Top Trading Strategies
Your strategy is only a small part of what you need to succeed at making Wealth with Crypto. It is critical to your success that you have the right trading psychology and a good trading plan in place, if you haven’t got it all together, you WILL NOT be a successful trader.
If you are keen to start trading crypto and want the complete package, not just the strategies I recommend you should Try Before You Buy The Free course is a great place to start and will teach you all the aspects that are required to be a successful trader, not just the strategy.
Yes, the strategy is important, but there is much more to trading, start learning it all here ====>> FREE TRADING COURSE.
If you have a good strategy, let me know, and we will have a look at it if you have any questions about the strategies I use feel free to ask in the comments below remember a strategy is only a small part of the big picture.
Hope you are Making Wealth with Crypto
❗ DISCLAIMER: I am not a financial advisor. This is not financial advice. The content and material I provide on 2dsirecrypto.com is my opinion only and general in nature. Always do your own research before investing any money. You should always understand the risks involved in trading and investing and seek advice from licensed professionals before undertaking any investments of your own.