A strategy is a small set of written rules you follow the same way every time. Without rules you drift into impulsive trades and cannot tell whether an approach works. The goal now is to fold the course into one simple, testable plan.
A five-step trend template
- 1. Bias: is price above or below the 200 EMA? Trade with it only.
- 2. Strength: is ADX confirming a real trend (rising, above ~25)?
- 3. Trigger: wait for a pullback and a momentum turn (RSI or MACD).
- 4. Entry: act on the candle close that confirms the trend resuming.
- 5. Risk: place a stop beyond the invalidation swing before you enter.
Notice each step uses a different type of tool — trend, strength, momentum — rather than three that repeat each other. The stop is defined by where the idea is wrong, not by how much you hope to make, and position size is set so that a single loss is small.
Test and expect losses
Before risking money, review the rules over past charts and, ideally, on a demo account to see how they behave. Every strategy has losing streaks; trend-following in particular takes many small losses to catch a few big winners. A plan you cannot follow through a drawdown is worthless.
Finally, keep expectations honest. No indicator setup guarantees profit, no combination removes losing trades, and anyone promising signals or riches is selling something. Your durable edge is discipline and risk control applied consistently to a plan you actually understand.
A strategy is a written, tested set of rules — bias, strength, trigger, entry, stop — where consistent risk management, not any indicator, is the real edge.