Should you’ve spent enough time around foreign currency trading forums, you then’ve probably encountered a trader or two who say that they’ve made consistent pips using only one trading system.

But you’ve also seen others who can’t seem to copy the OP’s stellar trading performance. Actually, this might be the case most of the time.

Don’t worry; this shouldn’t be since the OP is selling a get-rich-quick scheme. Well, no less than I hope not.

As an alternative, it’s more likely that the OP had used his/her strategy at fortunate time when the algorithm worked well with the trading environment that he/she used it on.

Traders normally spend tons of time tinkering with indicators, parameters, and trading rules without giving much thought to how long they could work.

Take a basketball game, for instance.

Team Blue has prepared to go against Team Red by breaking down the person players’ stats and analyzing their usual plays. They’ve made allowances for errors but in addition they generally expect the chances to tip of their favor.

Winning against Team Red means identifying which plays they’re executing and making adjustments for it. Not at the tip of the quarter, but as soon as possible.

Likewise, the perfect method to keep Team Red on its toes is to change up the players and methods as soon as Team Red has caught on to Team Blue’s plays.

Foreign currency trading has the identical principle. If you must be consistently profitable, you then’ll must be profitable across different trading conditions.

So, how will you be profitable in any trading environment? Listed below are a few suggestions.

1. Spend as much time as you possibly can studying price motion.

Nothing beats experience. While backtesting will go a great distance at declaring strengthening and weakening market and indicator correlations, your experience can even be useful in identifying the earliest signs of change in trading conditions.

Are bulls taking back enough control to finish a trend? Or has a market catalyst inspired a breakout from tight ranging conditions? Has a moving average crossover finally did not herald a change in trend?

Don’t hesitate to make use of a trading journal to assist you remember your observations.

2. Try each discretionary and mechanical trading

While mechanical trading works for quite a lot of traders, the systems also only work so long as you’re using the precise tools in the precise environment.

That is where discretionary trading is available in. Keep in mind that your profitability hinges on how briskly you possibly can adapt to changes in trading conditions.

But since quite a lot of systems are likely to use lagging indicators, you’ll need your experience and discretion to discover and benefit from market changes.

3. Experiment with different trading strategies

When you’ve confirmed a change in trading environment, it’s vital that you simply quickly change gears and adapt to it. This implies you’ll all the time must be ready with multiple “play” in your playbook.

Backtesting different time frames, indicators, and trading conditions will assist you expand your playbook.

More importantly, (successful) results from previous backtests will increase your confidence about jumping to a different strategy and forestall a myriad of trading psychology-related trading mistakes.

4. Be flexible

Simply because a technique has yielded you pips for days doesn’t mean that it is going to accomplish that for the subsequent couple of weeks.

Be ready to change your strategies as soon as your parameters call for it.

5. Practice good risk management

Just as basketball players don’t shout their intended plays to the opposing team, you furthermore mght won’t know WHEN market conditions will change.

But if you happen to practice good risk management habits – in each trade – you then can afford to be stuck with an open position that used an old strategy while trading conditions are changing.

Just ensure that you simply use the suitable strategies in your next trades!

Keep in mind that foreign currency trading is an ever-changing jungle that may’t be successfully navigated through with a single set of tools.

If you must be consistently profitable, you then can’t expect a single algorithm to ALWAYS work in your favor. Be ready with different strategies and be flexible in using them.