Skip to content Now that you've mastered thetechnical analysis on Tradingviewthe risk management and you know perform a fundamental analysis. It's time to bring all these skills together to create a coherent and profitable trading strategy.
How do you create a profitable trading strategy? It's not just a matter of assembling a few indicators at random. It's about building a complete trading system with precise, testable and reproducible rules that match your trading profile and objectives.
In this final chapter of our free training course, we'll look at how to choose your trading style, compose a complete trading strategy, master a simple and effective trading method and finally keep a trading diary to track your performance.
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Definition: Open positions lasting from a few seconds to a few minutes, targeting gains of 5-15 pips per transaction.
Advantages :
- Fast and frequent profits
- No overnight risk exposure
- Constant market action
Disadvantages :
- Intense psychological stress
- High transaction costs (spreads)
- Requires total availability
- Highly technical and demanding
Suitable profile : Experienced investors, always available, excellent emotional management.
Recommendation: Avoid for beginners. Start with slower strategies.
Definition: Open and closed positions on the same day, never overnight positions.
Advantages :
- No risk of next-day gap
- Quickly visible results
- Total control over positions
Disadvantages :
- Requires several hours a day
- Significant psychological pressure
- Dependent on intraday movements
Suitable profile : People available 4-6h a day, sufficient capital, experience in technical analysis.
Definition: Positions held from 2 to 10 days, targeting movements of 100-300 pips.
Advantages :
- Compatible with a professional activity
- Less daily stress
- Higher potential earnings
- Ideal for beginners
Disadvantages :
- Exposure to gaps and overnight news
- Patience required for results
- Positions can remain negative for several days
Suitable profile : Beginners, professionals, limited time budget.
Definition: Positions held for several weeks to several months, based on fundamental analysis.
Advantages :
- Very little time required daily
- Huge potential gains
- Minimal daily stress
Disadvantages :
- Long-term capital
- Maximum exposure to events
- Very slow results
- Strong conviction required
Suitable profile : Patient investors, substantial capital, excellent macro-economic knowledge.
Time available per day :
If you have less than 1 hour, the long-term trading strategy is for you. Between 1 and 2 hours, swing trading is for you. With 4 to 6 hours available, you can start day trading. Over 8 hours, scalping is possible, but not recommended for beginners.
Favourite times :
The morning from 8am to 12pm corresponds to the European session. In the afternoon, between 2pm and 6pm, you benefit from the EUR/USD overlap. In the evening, from 8pm to midnight, the US session takes over.
Are you patient or impatient?
If you're patient, swing or position trading is for you. If you're impatient, day trading may be for you, but only after you've gained some experience.
How do you cope with stress?
Can you handle stress? Day trading is possible. You don't handle it well? Swing trading is for you.
Do you like to make quick decisions?
If so, the shorter styles are for you. If not, go for the longer styles, which will give you more time to think.
A winning trading strategy must answer 6 fundamental questions:
You need to define precise technical conditions, identify objective entry signals and wait for several indicators to converge before taking a position.
Place it on a logical technical level that respects your maximum risk percentage while remaining sufficiently distant from market noise.
Aim for a realistic technical target with a favourable risk/reward ratio, generally on an identified resistance or support level.
Define a precise capital percentage, calculate your position size accordingly and always respect your money management.
Select your currency pairs, determine the optimum times to trade them and avoid over-diversification, which dilutes your attention.
Set up partial exit rules, plan the management of your trailing stop and anticipate your behavior in the event of a market reversal.
Strategy name : [Give a simple name].
Trading style : [Scalping/Day/Swing/Position]
Drawn pairs : [Maximum 3-4 pairs to start with].
Opening hours : [Favorite Sessions]
Entry requirements :
- Main technical signal
- Secondary confirmation
- Market requirements
Risk management :
- % risk per position
- Stop loss investment
- Take profit target
- Minimum risk/return ratio
Position management :
- Exit rules
- Authorized modifications
- Behavior in case of...
The breakout trading strategy is perfect for beginners, as it's based on easy-to-understand concepts with clear visual signals. It can be applied to all pairs and is compatible with all trading styles. It's also the basis of many advanced strategies that you'll develop later.
Fundamental concept: When the price breaks an important level (support or resistance), it tends to continue in that direction with momentum.
Market psychology : Stop-loss orders accumulate behind important levels. When these orders are triggered, they create additional volatility. Traders then follow the break, creating a self-fulfilling prophecy.
Identification of key levels :
Example of a trading strategy for a break of resistance (buy) :
Phase 1: Identification
Open your 4H or Daily chart
Identifies clear resistance tested 2-3 times
Check that the general trend is favorable
Wait until the price approaches this level
Phase 2: Preparation
Place a stop-buy order 10 pips above resistance
Set your stop loss 20 pips below resistance
Calculate your position size (1% maximum risk)
Set your take profit according to the 1:2 ratio
Phase 3: Execution
Let the market trigger your order
Don't change your levels on a whim
Watching without intervening
Stick to your initial trading plan
Phase 4: Management
If the price quickly falls back below resistance: stop loss activated
If price continues: let run until take profit
Note the result in your trading journal
Analyze what worked and what didn't
Break with throwback or pullback
This variant consists in waiting for the price to come back to test the broken resistance (throwback) or the broken support (pullback). You enter a position on the rebound of this new support. This trading technique is safer, but generates fewer trades.
Direct break
With this trading method, you enter the breakout immediately. You'll have more trades, but also more false signals. This variant requires rigorous position management.
A trading journal is not optional. It's your tool for continuous improvement, enabling you to identify recurring mistakes, optimize your strategy with real data and manage your emotions more effectively. You'll be able to track your progress objectively and develop your discipline over time.
Technical data :
- Entry/exit date and time
- Tradée pair
- Position size
- Entry price, stop loss, take profit
- Earnings in pips and euros
Market context :
- Overall trend (H4/Daily)
- Reason for input (precise signal)
- Economic news of the day
- Observed volatility
Personal analysis:
- Confidence before entry (1-10)
- Emotions felt
- Compliance with the initial trading plan
- Mistakes made
- Lessons learned
TRADE #45 - 03/15/2024
Pair: EUR/USD
Style: Swing Trading
Admission: 1.1050 at 2:30 p.m.
Stop Loss: 1.1020 (30 pips)
Take Profit: 1.1110 (60 pips)
Size: 0.03 lot
Risk: 1.2% of capital
Background:
- Trend H4: Bullish
- Resistance breach 1.1040
- No important news
- Normal volatility
Emotions:
- Confidence: 8/10
- Stress during the trade: 3/10
- Compliance with trading plan: 100%
Result: +60 pips (€180)
Ratio: 1:2 ✓
Analysis:
✓ Excellent technical input
✓ Patience respected
✗ Could have waited for pullback
To document your trades effectively, you have several options:
Excel or Google Sheets remains the most popular solution. You can create customized tables, add formulas to automatically calculate your performance and generate graphs to visualize your progress.
The paper notebook, often underestimated, offers total freedom. You can draw your graphs, annotate freely and jot down your emotions on the spot. Handwriting also encourages memorization and reflection.
Notion is the modern, flexible alternative. This platform allows you to create sophisticated databases, integrate images of your trades and completely customize your journal to your needs.
excel trading journal
Download our excel trading journal template to track your trades, analyze your performance and optimize your trading strategies.
Performance metrics :
- Number of winning/losing trades
- Win rate (% winning trades)
- Average risk/return ratio
- Monthly profit/loss
- Biggest win/loss series
Behavioral metrics :
- Compliance with trading plan (%)
- Most frequent errors
- Most/least profitable pairs
- Best-performing schedules
Adjustments to be made :
- Changes in strategy
- Improving discipline
- Objectives for the following month
Discover our complete training program specially designed for novice traders and those who don't yet dare to take the plunge. If you're interested in trading but reluctant to take the plunge, our courses are for you. We demystify trading from the ground up, with simple, step-by-step explanations, and show you the different trading strategies available. And even if you think it's too complicated or reserved for experts, our pedagogical approach will prove to you that trading is accessible.
Phase 1 - Consolidation (Months 1-2) : During this first phase, open a demo account and practical with a simple strategy. Keep a detailed trading diary of all your trades and stick religiously to your money management. Concentrate on a maximum of 2 pairs to really master them.
Phase 2 - Transition (Months 3-4) : Then switch to a real account with minimum capital. Continue to apply the support/resistance breakout strategy you've now mastered. Analyze your performance monthly and adjust your strategy according to the results obtained.
Phase 3 - Development (Months 5-12) : Refine your strategy as you gain experience. Explore other trading techniques gradually, while very gradually increasing your position size. This is the time to really develop your trading psychology.
Phase 4 - Mastery (Year 2+) : Diversify your strategies carefully and consider other markets such as indices or commodities. Teaching other novice traders can be a good way to keep learning. You can now consider trading as a serious additional income.
Realism about results:
- Consistent profitability requires a minimum of 1-2 years
- 90% of beginners lose their first 6 months
- Start with money you can lose entirely
- Trading is not a get-rich-quick scheme
Warning signs to watch out for :
- Increase risks disproportionately
- Neglect of money management
- Emotional trading (anger, euphoria)
You now have all the basics to create a solid trading strategy and begin your journey as a trader on the foreign exchange market. The key to success is learning, discipline and experience.
Start small, learn from your mistakes, keep a rigorous trading diary and stick to your money management. With perseverance and a methodical approach, you can develop the skills you need to succeed in trading.
Capital preservation always takes precedence over the quest for quick profits.
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