Module 4: Technical Analysis
Building a Trading Strategy
7 min read
A strategy is a written set of rules for when to enter, exit and how much to risk.
Common strategy types
Trend-following strategies trade in the direction of the prevailing trend, often entering on pullbacks. Range strategies buy near support and sell near resistance when the market moves sideways. Breakout strategies enter when price leaves a range with momentum.
Each works in some market conditions and fails in others. None works all the time.
What a complete plan includes
Markets and timeframes traded; the exact entry conditions; stop-loss placement; take-profit or exit rules; position sizing; and conditions when you will not trade (for example around high-impact news).
Test the rules on historical charts and a demo account before risking real money, and keep in mind that past results do not guarantee future performance.
Key takeaways
- Write your rules down.
- Match the strategy to market conditions.
- Test on demo before trading live.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.