How I optimized my strategy and preparation: market prep, backtesting, and clear rules
What I learned when I improvised without a real strategy
At first, I traded on impulse: I would see a pattern that I “liked,” open a position, close it without clarity, and change assets every day. I had no plan, did no backtesting, and my rules were flexible: I modified them according to “how I felt” about the market. The result: losses, frustration, and lack of confidence.
One day I decided that this couldn't continue. I committed to a different approach: preparing each session, testing the strategy on past data, defining firm rules. That changed my trading profoundly.
Step 1: Prepare for each market session (market prep)
Review macro conditions and news before trading
Before opening the platform, I check what economic events are coming up, what news could affect my assets, and what the expected volatility is. Avoid surprises. If there is a big announcement or high volatility today, I adjust my plan to trade with less risk.
Identify assets and areas of interest
I select which assets I am going to follow that day. I don't do it randomly: I look at which ones are trending, which ones are in range, I identify key support/resistance levels, possible entry and exit zones. Having those levels marked allows me to react with more certainty and less emotion.
Visualize possible scenarios
Before trading, I ask myself: “What will happen if the market rises? What if it falls? What if it delays significantly?” I consider three scenarios: favorable, adverse, and mixed. I prepare my plan for each one, so if something unexpected happens, I don't panic.
Step 2: Backtesting: testing to build confidence
Define the strategy with clear rules
First, I write down my strategy in detail: which indicators I will use, exact entry and exit conditions, position size, stop-loss and take-profit, trading hours, and permitted assets. This clear definition serves as a manual that I always review before each backtest.
Test on historical data
I apply my strategy to past data, covering different markets and different conditions (trend, range, high and low volatility). I evaluate results such as net profit, percentage of winning trades, drawdowns, and consecutive losses. If it doesn't work in many scenarios, I don't use it.
Cross-validation and avoiding overfitting
I don't just look at nice statistics from the past. I check that the results are consistent. I use out-of-sample periods that are not included in the optimization, I test different parameters, I change conditions. If it only wins in the data that I “adapted” it to, I am suspicious: it may not work when everything changes.
Step 3: Establish clear rules that don't negotiate with you
Entry and exit rules
I can't leave it to improvisation: my rules say exactly when I enter and when I exit. No interpretations. If the signal isn't there, I don't enter, even if my “instinct” says otherwise.
Daily and loss limits
I have a maximum loss for the day or for the session. If I reach it, I close the trade. Likewise, if I have several negative trades in a row, I stop. That rule protects me from the emotional wear and tear that leads to bad decisions.
Schedule and permitted assets
I only work with assets that I know or have tested thoroughly. I also restrict trading during hours when there is no liquidity or unexpected events. I don't trade all day, because my performance drops if I am overexposed to stress.
Step 4: How these practices changed my performance
Fewer mistakes, greater clarity
With preparation and firm rules, I no longer enter into dubious trades. I see fewer silly mistakes: trading in range without a strategy, chasing unconfirmed breakouts, acting on emotional signals
Confidence to execute the plan
I know that if the strategy is well tested and the session is prepared, I have the support to follow my rule when the market is not cooperating. That gives me peace of mind: I don't feel like I'm “gambling everything.”
Improvement in sustainable results
I didn't get rich overnight, but my balance sheets stopped being roller coasters. The profits aren't huge on every trade, but they accumulate over the month because I avoid unnecessary large losses.
Conclusion
What transformed my trading wasn't having better indicators, but working before trading: preparing the session, testing what I'm going to use on yesterday's data, defining rules that aren't broken by emotion.
Today my strategy is structured, my results are more consistent, and my mind copes better with bad days. If you want, try this exercise: before your next session, write down your rules (entry, exit, stop, schedule), do a quick backtest of those rules on a couple of historical days, and only trade if the results make sense. That prior discipline can make the difference between losing by chance or winning by design.
