Choosing and writing your own strategy

You have now met seven methods. Using all seven is a common trap: a breakout on Monday, a fade on Tuesday, a news trade on Wednesday, and no idea which one works.

Choose one method

Which method suits which market?

Fit of seven trading methods to four market conditions. Use the method buttons to see details.
TrendingTrend	RangingRange	Volatile / newsNews	QuietQuiet
Good	Poor	Mixed	Poor
Good	Poor	Poor	Mixed
Mixed	Poor	Good	Mixed
Poor	Good	Poor	Good
Good	Good	Mixed	Poor
Mixed	Good	Poor	Mixed
Poor	Poor	Mixed	Poor

Trend following

Join a move that is already under way and stay in until the trend shows clear signs of ending.

When it works: Long, persistent moves, often driven by a shift in interest-rate expectations.
How it fails: Choppy, sideways markets: a run of small losses as each "new trend" reverses.
Typical profile: Often wins only 30–45% of trades; winners are typically several times the size of losers.
Holding time: Days to weeks, sometimes months.

Read the lesson: Trend following →

Tap a method to see when it tends to work, how it fails and its lesson. Pick one that fits the markets and hours you actually have. Illustrative: every market and setting differs.

Choosing is mostly ruling out. Start with your style. With a full-time job, scalping and trading data releases at 13:30 are out. Swing trading on H4 and D1 charts fits around work; day trading needs free hours inside the session you trade.

Pick two or three pairs that are active when you can watch. Then read the map’s columns: every method has conditions that hurt it. Accept its weak spots and write a “do not trade when” rule instead of bolting on a second method. Two blended methods give results nobody can read.

Write it as four decisions

The four decisions from lesson 1 on a pullback setup. Your strategy card writes each one down in words. Illustrative prices.

As What a strategy actually is showed, every strategy is four decisions made in advance:

Setup: what the market must show before you look for an entry.
Trigger: the exact event that gets you in.
Stop: where the idea is proved wrong.
Exit: where you take profit, and what you do while the trade is open.

Add two more lines: limits (maximum trades, open positions and a daily loss limit) and testing status (idea, backtest, forward test on demo). If a rule needs a paragraph of “it depends”, it is not ready. Your trading plan wraps around this card.

Example: one page for a trader with a full-time job

Method and style: pullback, swing; charts checked before and after work.
Markets: EUR/USD and GBP/USD only.
Setup: D1 closes above a rising 50 EMA (mirror for shorts) and H4 pulls back to a level that held before, e.g. 1.0800–1.0820.
Trigger: an H1 bullish engulfing or pin bar closes back above the level, seen at a check. Enter at that close: 1.0830.
Stop: 5 pips below the pullback low, 1.0795: 35 pips. Skip if over 60 pips.
Size: 1% of $5,000 = $50. $50 ÷ (35 × $10 per lot) = 0.143, rounded down to 0.14 lots, so $49 at risk.
Exit: 2R target = 70 pips = 1.0900. Stop to break-even at +1R, 1.0865.
Limits: max 2 open trades (2% open risk). The pairs often move together, so two longs are nearly one 2% bet.
Testing: 80 backtested trades, 25 on demo. Review on the first Sunday of each month.

Trade it unchanged, review it monthly

Trade the card exactly as written, on demo or at small size. Review it monthly, but judge the method itself only after about 50 trades, as Testing a strategy showed. Log every trade in R in a trading journal, marking whether you followed every rule.

Change one thing at a time

At each review, change at most one rule, backed by a pattern across 20 or more journal entries. Change two and you cannot tell which one helped. Never loosen a rule during a drawdown. The hard part is telling a bad patch from a broken method:

Probably a normal losing streak	Probably time to change
Each loss is close to −1R and followed the rules	Clean trades show zero or negative expectancy after 50 or more
The streak is no longer than the worst in your backtest	The drawdown is clearly deeper than anything in testing
The market still shows the conditions your setup needs	The market has changed for months, e.g. a trend method in a long range
Your adherence is high	Adherence stays low because the rules don’t fit your day

At a 40% win rate, six losses in a row turn up regularly over 100 trades. That is a normal losing streak. If you keep missing triggers at work, change the rules.

Monthly strategy review

0 of 7

Every trade logged in R, with a screenshot
Adherence: clean trades ÷ all trades (aim for 90% or more)
Total R and average R per trade, before and after costs
Biggest loss checked: was it close to −1R?
Longest losing streak compared with the worst in testing
Market conditions this month compared with what the setup needs
At most one change, backed by 20+ journal entries, written on the card with the date

Try it

Strategy card

0 of 16 parts filled

Strategy nameA short name you will use in your journal.

MethodThe family of strategy it belongs to.

MarketsOnly the pairs you have tested it on.

Style and timeframesDirection, setup and entry timeframes.

1SetupThe market condition that must be true

Trade only when…What the chart must show before you even look for an entry.

Do not trade when…Conditions that switch the strategy off.

2TriggerThe exact event that gets you in

Entry eventSpecific enough that two people would enter on the same candle.

3StopWhere the idea is proved wrong

Stop ruleA place on the chart, not an amount you can afford to lose.

Risk per trade (%)Share of the account lost if the stop is hit.

4ExitHow winners and stalled trades end

Target ruleWhere you take the profit, written as a chart rule.

Trade managementWhat, if anything, you change while the trade is open.

Time exitWhen a trade that goes nowhere gets closed.

LimitsWhen you stop for the day or week

Maximum tradesPer day and per week.

Daily loss limitThe loss at which you stop trading until tomorrow.

Testing statusHow much evidence the rules have so far

Tick every stage the strategy has passed.Idea written downBacktested tradesForward-tested on demo tradesLive at small size

Next review dateWhen you will look at the results and decide what to change.

Your strategy on one page. Tap Load example to see the worked example, then make it yours. It saves in this browser only, so download a copy.

Notice how the boxes you can’t fill in quickly are decisions you haven’t made yet. Those gaps are where impulse trades come from.

Quick check

Question 1 of 4
You work 9 to 5 and can check charts before and after work. Which style fits best?
Question 2 of 4
A month has 10 trades: 3 wins at +2R, 6 losses at −1R and 1 break-even. What is the total?
Question 3 of 4
You have lost five trades in a row, each about −1R, all by the rules. Your backtest's worst streak was seven. What now?
Question 4 of 4
At your review you want to tighten the setup and move the target from 2R to 3R. What is the better approach?

Go deeper: How to write a trading plan · Trading discipline: why rules beat willpower · How to keep a trading journal