Portfolio of strategies. How to create it correctly.

Any trader, as he gains trading experience, understands that for stable earnings it is necessary to have a proven trading strategy that has shown good statistics on testing. But not every trader knows that to improve trading efficiency, a portfolio of strategies should be created . That is, he should always have different trading systems “at hand”.

The thing is that the forex market is a very complex financial organism. The situation is constantly changing and sometimes completely unpredictable. And this affects the effectiveness of the applied trading strategy. Good statistics cannot guarantee a profitable trade for a long time. In addition, it can be useful to use two or three vehicles at once. This is also a kind of risk diversification. If we get a loss on one strategy, then thanks to another TS we will be able not only to recover the losses, but also to gain a profit.

Today I will tell you how to create an optimal portfolio of strategies.

Recommendations for the formation of a portfolio of strategies

Recommendations for the formation of a portfolio of strategies

When deciding to build your portfolio of strategies, consider the following important guidelines.

To improve trading results, it will be useful to use TSs created for different currency pairs. Each trading instrument has its own characteristics. A strategy that takes them into account will be more stable and profitable. Unsuccessful trading on one currency pair (TS) will be compensated for by a profit on another currency pair.

It is not recommended to include in the portfolio strategies that are created for the same timeframe. If you have several such trading systems, then choose one of them for trading.

The selected trading strategies should be based on different analysis methods. That is, for example, one of the vehicles operates based on the readings of the indicators. The other is designed for trading during periods of important news. And the third generates signals based on candlestick analysis.

Strategies should also differ in the type of market for which they were created. One is trend, the other is for trading during a flat period.

You can choose strategies depending on the trading time: day and night.

In order to make it convenient to trade simultaneously on two or three strategies, it is recommended to open a trading account for each of them. Otherwise, confusion can arise in the trading process.

And, of course, the portfolio of strategies should be periodically optimized. Perhaps some vehicle will need to be removed and a new, more efficient one added.

Such work takes time and effort, but these costs will pay off with profitable trading results.