Why Strategies Stops Working After Some Time.

[moonchild]

When I was starting out on Forex I was very addicted to strategies and I can't take my mind off YouTube, I'm always there trying to find a new strategy to milk the market, this was my routine for a very long time, I didn't regret it though because that was how I met my mentor.

But there was a pattern that I just discovered and I found out that a lot of newbies experience it too.

And that is, after getting a particular strategy and after testing out on demo or whatever, the performance would be excellent and you'll be very happy like a child that just got a new toy haha.

But after back testing it for some time say a week or a month you'll find out that it is not effective at all and it's not working or stopped working completely.

This is because most of these strategies are just bunch of lagging indicators that are not really predicting the market but using past market moves to dictate the future this is bad because the market is dynamic and it does not follow rigid rules.

The best thing to do is to learn technical analysis in depth and just use indicators as confluence not really entry and exit signals

 

[Finger Geek]

When I was starting out on Forex I was very addicted to strategies and I can't take my mind off YouTube, I'm always there trying to find a new strategy to milk the market, this was my routine for a very long time, I didn't regret it though because that was how I met my mentor.

But there was a pattern that I just discovered and I found out that a lot of newbies experience it too.

And that is, after getting a particular strategy and after testing out on demo or whatever, the performance would be excellent and you'll be very happy like a child that just got a new toy haha.

But after back testing it for some time say a week or a month you'll find out that it is not effective at all and it's not working or stopped working completely.

This is because most of these strategies are just bunch of lagging indicators that are not really predicting the market but using past market moves to dictate the future this is bad because the market is dynamic and it does not follow rigid rules.

The best thing to do is to learn technical analysis in depth and just use indicators as confluence not really entry and exit signals

You are right. Most strategies are not for life. Market changes every day so as the strategies used on some indicators losses there authentication. And moreover I will not advice people learning to trade to start with demo account because using a demo account works differently with a real account.

I could remember when I tried a strategy with demo account. The strategy allows me to take profit after 10 pips. And I was doing well with the strategy. But when I move to real account. I discovered that the profit I make with real account is different from the one that I made on demo account.

The best way to start forex trading as a beginner or trying a strategy is to open a real cent account with like $5 to $10. That is when we will know how efficient the strategy is.

Going with what you said. I too don't advise people to depend on strategies that they know for long because they don't last for long. The best way is too learn how to analysis the market and best ways to use the indicators well. Each indicators has there own meaning .

 

[Asahi]

That’s the reality, you can’t stay here with a fixed trading system! Basically Forex market is so volatile & there is nothing like a fixed rule; so don’t rely on any specific system! In my live trading I mainly use Free news trading updates from Eurotrader broker, it’s completely free but good thing is, I get useful news trading updates almost instantly! As a result, now my news trading success ratio is more than 85%! Actually, good brokers always provide useful features for their clients!

 

[Dita Walczak]

Strategies are generally technical tool-based. It’s never a good technique to rely on strategy because Forex market is highly volatile. A technical tool works technically but market moves fundamentally. So, to capture the market trend accurately, a trader needs to run fundamental analysis too besides using all technical tool-based strategies.

 

[LaneBall]

No strategies remain valid and profitable throughout as the forex market is highly volatile and the market conditions keep evolving. So, for earning profits, it is very important to keep devising, revising and back testing strategies in order to stay up to date with the dominant trends in the market and modify the trading plan accordingly.

 

[pawelkolasa]

Strategies lose edge after some time because of the volatility in the market. The market conditions keep on changing which leads strategy to lose its edge.

 

[Shrubbery]

Trading strategies do not work after some time because they are no longer applicable to the current market situation. Your trading strategies are supposed to be flexible so that you can trade in different market situations. Traders should not rely on a particular trading strategy. Instead, test different strategies. And choose to trade with one that fits for the currency market scenario.

 

[Setho]

It is very important for people to know that prices in financial-market is usually not in the same direction . There are so many things that can decide where the price is going to go and as such you can only be able to try and predict for a short-term but on the long term it is almost impossible to know because it is so dynamic and things can be able to change so quickly .
This means that you should also be changing when it comes to your strategy because there are some markets that are very effective whenever you are using the Fibonacci retracement trading indicator and there are some markets that might be better off you using the exponential moving averages or just simple volume .

This is why it is not advisable that you should have only one trading strategy as things usually change very quickly but you should try to learn at least two or even three . In this way you can be able to know the different things that can happen in the market and then plan appropriately if any of them . This is also why the use of trading bot is usually is not sustainable even as they are very expensive.

 

[shirleencomer]

Traders stop working because of many reasons. Market conditions, volatility, volume are some of the reasons why your strategies no longer work. Thus, it is important for traders to keep testing different strategies and trade in different market conditions. So they can be flexible and trade as per the market demands.

 

[Eduard Hahn]

Strategies lose edge after some time because of the volatility in the market. The market conditions keep on changing which leads strategy to lose its edge.

I totally agree with you. Traders should prefer backtesting their trading strategies as soon as they find out that it is losing its edge.

 

[Sotherefore]

The point is that, I don't really have time to be checking up what other people are saying on social media like YouTube or any other one. if I am interested to trade forex or cryptocurrency the most important thing I will just do is to find someone that is really good in trading and from there I will learn about technical and fundamental analysis with the person.

Even if the person asks me to pay a huge sum of money and the person is willing to teach me to the full understanding that I am able to predict the volatile market on my own , I don't really have any problem with that after all after the learning process I will be able to make money with trading without having to look for a way of getting signal from other experts.

It was actually then that I was losing my money trying to get expect to predict the market for me, but nowadays I don't do things like that anymore. I will just learn whatever I need to make money with because that is just the simple way. if I am really good I can be able to make money consistently without any problem.

 

[btaliat]

The volatility of the forex market, the dynamism of the currencies we trade in and the instability of human nature that are the traders on forex explains the reasons behind the lasting effectiveness of a particular strategy for so long. It doesn't really matter how effective it is, it will still be irrelevant at last.

Just like you said, the best thing is to have the knowledge of technical and fundamental analyses. These two will help you to predict the values of coins and to know some basic things that can help in minimizing loss and maximizing profit.

But we trader should know that it is not that good enough to depend solely on these tools while trading. Most time, predictions may go wrong as well. That's the reason why we don't need to depend so much on it. We need to be conscious of the fact that volatility of the market can never let the market easily be predicted.

Though I saw a comment where the poster said he's ready to learn the gimmick behind trading. The fact is that no one knows the gimmick behind it. There is no way you will do forex or cryptocurrency that you won't loss, you can only minimize your loss.

 

[Critomancy]

Strategies are made on the basis of trends and patterns. However, as a volatile market, the forex market moves or changes differently. So strategies no longer work for the current market situations.

 

[Ithedicious]

Well , I don't really know of that because I have never trade cryptocurrency before or forex , but I believe if most of these strategy are not working as it was before , it is the duty of a trader to be updated about the new modern strategy that will work because obviously we must adapt to the new modern things that is happening around the world and our areas of business

If you fail to understand all these things, it might be possible for us to be left behind in so many things . If that is just the case then I don't see anything bad here because as a trader and you are making profit then you should also be able to continue learning at least to understand more about your trading and adopt some modern trading strategy that can even help you make more profit .

I always believe that technical analysis is just technical analysis and if a trader understand how this can be used to predict the volatile market that there is no possibility of expiration . maybe all these things are just normal

I will just try and find out from someone who is trading Forex about this.

 

[Tactical]

The forex market is a volatile market, and there are many social and economical factors that influence price movements. The price movements can be very abrupt and unpredictable at times. Thus, for traders, relying simply on strategies or technical analysis may not always work.

 

[quindene]

In my view, it is absolutely wrong to think strategy stops working after some time. Problem with a lot of traders is that they stop trading when profits start to diminish. For example, in the long term, the trend is always your friend . So you have to keep those long positions running and keep the stop-loss under control for making profits. If you close positions prematurely, you will end up losing money. So, it is very important to follow all rules of your strategy and not change them after some time.

 

[Feeble]

Strategies are small edges in the market. If the market changes, you lose that edge. Thus, to become profitable, you also need to be flexible. Have some backup strategies and learn to trade in multiple market scenarios.

 

[Rookery]

Trading strategies stop working because the market changes and they fail to sync with it after the change happens. In deep, strategies also stop working because of other factors like curve fitting, structural and cyclical changes, survivorship bias, behavioural mistakes, commissions, and slippage. Short-term trading is a zero-sum game and you need to accept the fact that trading strategies will stop working after a while.

 

[Wordsmith]

It’s just that no strategy is 100% accurate and it works in real-time only. If you want to make money, you will have to change the variables so that your strategy is up to date in accordance with the market conditions.

 

[glabella]

Strategies also need continuous improvement and remodeling in order to comply with your current trade expectations and needs. Every trade brings with it different challenges so strategies should be changed and customized continuously as per the change.