Apiary Fund Blog

The Least Effective Trading Strategies

[fa icon="calendar"] Jun 10, 2019 6:00:00 AM / by Lukas MacMacKen

As you progress through your trades and learn more about the markets and how they move, you develop a stronger strategy and sense of what doesn’t work for you. The least effective strategies can be a relative term. There are many instances that I can recall where one person’s strategy works great for them but someone else just can’t pull off the strategy. The only real “least effective strategy,” however, is what works least for you personally.

A very vital point in identifying your least effective strategy can be time. If you're attempting a very short-term strategy, such as Shawn Lucas’ Wobble technique, but you don't have the focus for really quick trades or you can only trade while dinner is cooking and the kids are doing homework, you may not be able to utilize that strategy due to distractions. On the other hand, if you're working a strategy that needs to be checked up on every few hours, this becomes a least effective strategy for you if you work 8-12 hour shifts and you won’t be able to check on the trades at work and are possibly too tired to stay up late enough to trade Knowing what time frame your trading should take place in is the best way to make sure you get started on the foot you need to for trading.

On the opposite side of the equation, a typically very poor strategy is revenge trading. There comes a point where losses have to be given into. A very common problem is becoming too emotional in your trading. Losing happens to everyone, but when traders have that losing day, one thing that usually goes through their mind is something along the lines of" “If I double my lot size, I only need X amount of pips to recover my losses and get back into profit.” While that may be the case, doubling the lot size of a trade means double the losses too, and if the day hasn’t been going as planned, what is there to say that is going to change when you start that revenge trading. If you talk to most traders, Shawn Lucas included, they will say that there is a certain amount they will lose, be it pips, percent, or dollar amount, before they will call it quits for the day to reduce the total loss on the account.

Losing is not fun. Having a well established strategy, however, is the best way to reduce those losses. While you can learn from your losses and improve on your strategy from them as well like discussed in the “How Losing in Trading Leads to Learning article, they also show you what your least effective strategy is. If SMA crossovers consistently lose for you, or if your Achilles heel is more of MACD and Volume comparison, that is the least effective for you. While listening to what works for others is great and can make tremendous bounds in your personal trading, what works for one person doesn’t work for everyone. Shawn Lucas couldn’t pick up how I trade like it is nothing and I couldn’t pick up his strategy at the drop of a dime either. While we’d be able to get results, they aren’t our most effective strategy, and that is what you need to come out on top in the trading game.

Topics: Trading Strategy, Trader Tips, shawn lucas, trading goals

Lukas MacMacKen

Written by Lukas MacMacKen

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