Hi, everyone I hope everyone is fine, today I want to discuss a very important aspect in one's trading, and that is all about trading strategy. We all know that a good trading strategy will propel us to success and a bad strategy will make us a loser.
Generally speaking a good strategy if followed religiously it will give us an upward equity curve while a bad strategy will give us an downward spiral or a roller coaster ride. Knowing whether a strategy is good or bad is not really complicated we just have to open our mind in order to realize it.
First you need to know the RR ratio of a particular strategy, on the average it should not go below 1:1 the higher the better, another thing is that the winning rate must be at least above 50% again the higher the better(55% to 70% is good). If your trading is within this bound and you consistently follow it then perhaps your on the good side of your trading and will keep your account intact in years to come, that's for sure.
On the other hand a bad strategy is the exact opposite of everything I mentioned above but a bad strategy can disguise as a good strategy at the start that is why so many traders fall to this trap and follow the wrong way. There are strategies or traders that has very high winning rate(as high as 95%) at the start but if you look on their RR it is really bad. A bad strategy can give an impression to most traders that it is a good strategy because its making profits consistently for few months, but the truth is that a strategy that don't adhere to the very basics of good trading practices will not prosper into a real profitable strategy. A bad strategy is like building a house without a good foundation.
So if you want to succeed and become a consistently profitable trader you must adhere to good trading practices first and everything will fall into places.
I hope you pick something meaningful in this post, good luck to all of us!
