Changing Strategies
- Thread starter 15%
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When your trading instrument is trending, you want to use a trend following strategy. When your trading instrument is choppy, you want to use a RTM strategy.Quote from 15%:
It's been 1 year that I have been paper trading. I realize that some months my plan would work and some not. Should I have different strategies for different months?
Phew..thought trading would be a piece of cake!!!
Quote from 15%:
It's been 1 year that I have been paper trading. I realize that some months my plan would work and some not. Should I have different strategies for different months?
Phew..thought trading would be a piece of cake!!!
If you don't know what type of price action your trade strategy performs well in...having hundreds of strategies will not help you.
For example, if you're using a trend following strategy...to use it successfully you'll need to be able to recognize when markets are trending so that you can then apply your trade strategy. Yet, if you have hundreds of other strategies and you don't know what type of markets they're suitable for...you'll get burnt.
Therefore, lets pretend you're using only ONE trade strategy and its a trend following strategy. You need to be able to recognize when price action is trending so that you can then apply your trade method and know when price action is not trending so that you'll know when to stay on the sidelines (not trading and ignoring trade signals that appear in market conditions not suitable for your trade method).
Easier said than done.
You asked if you should change strategies. The answer is yes, and it has nothing to do with months (unless you're using some weird month-dependent strategy).Quote from 15%:
lose a trade, sideline or RTM...so, one of this I ought to do?
Sometimes price is trending and that's when you want to use a trend following strategy. Sometimes price is choppy and that's when you want to use a RTM strategy.
You won't specify what type of strategy you're using now so nobody can give any more detailed suggestions than the above. So either forget about switching strategies or figure out a regime switch and find another strategy in the regime your current strategy isn't designed to cope with and alternate your two strategies based on the switch info.
Fwiw (and I'm not suggesting you purchase, this is fyi only) ...
http://www.mindfire-systems.com/Catscan.html
