Discovering a successful trading strategy is a monumental task, it may take months or years depending on the platform you are using. But once you find a good system, it may reap profits for you lifelong.
Assuming that you have already found a successful trading strategy, let’s see what should you do next with it.
How do you know that your Strategy is Successful?
Even before going to the details on the next steps after finding a successful strategy, let me first focus a little on what ‘successful strategy’ means.
It’s not always the profit % the makes a strategy successful, there are several different parameters involved.
A strategy should follow proper risk management techniques to control the losses, the drawdown should be minimal and it should withhold high volatility conditions to be termed as successful.
Next Steps after discovering a Successful Trading Strategy
I would summarize this in 5 simple steps. You may skip Step 1 if you have already done this.
Step 1: Backtest and forward test the system on historical data. Use different symbols, data ranges to verify the robustness of the system under all market conditions. Amibroker is probably the best tool to carry out this step.
Step 2: Paper trade the system for atleast 15 days. You may use Tradetron for the best paper trading experience.
Step 3: If you are satisfied with the paper trading results, deploy the system live in a manual mode. Meaning whenever the system generates a signal place the order manually with your broker. Repeat this for atleast 1 month.
Step 4: If the manual trading results are consistent, explore automation opportunities so that no human intervention is required to place the orders. Again Tradetron platform can help you to fully automate your trades.
Step 5: Scale-up the capital based on system performance and once things are on autopilot, look out for new system opportunities. Never ever stick with just one system!
I hope this was helpful!
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