How To Validate A Forex Trading Edge To Succeed As A Trader
In this Forex trading vlog, I share what I believe is necessary to confirm your Forex trading edge as a trader. Vlog #207.
Do You Have A Successful Forex Trading Edge?
If you seriously want to become a successful Forex trader, you'll to have some data to base yourself on. That will allow you to know what you can potentially expect while trading the Forex market.
Without that, you are only relying on luck & chance, which are definitely not factors of long-term trading success.
My Recommendation To Validate Your Forex Trading Edge
I personally aim for a backtesting of 100 trades before concluding anything about a trading strategy. I pay close attention to the win rate, average winning trade, and average losing trade.
That being said, I'll also look at the slope of the graph. A trading strategy that produces too many drawdowns isn't necessarily good to trade. You'll be wondering when you'll finally get out of the drawdown and that can be discouraging.
Always Re-Evaluate Your Trading Edge
No matter what I trade, I'll ensure to do periodic reviews. After closing 20 trades of a specific strategy, I'll go back to re-evaluate my results and my Forex trading edge.
By re-evaluating your edge, you ensure that you will be able to adapt in case the market change. Remember that adaptability is one of the key things helping traders be profitable over the long run.
What have you done to validate your edge? Are you also implementing periodic reviews? Comment below and let's keep the discussion going!
If you are aspiring to Forex but wonder how to put together a solid trading plan, I recommend you grab my FREE One-Page Trading Plan Template. It will help you simplify your trading strategy on a single page!