This is simple: to give you an edge. The main purpose of the strategy is
to make you trade with rules that you have determined will work. It will
keep you from trading foolishly and from overtrading—at least from the
part of overtrading that comes from putting on too many trades. Though
some strategies call for a lot of trades, a strategy will at least keep your
trades focused on what you think are the best trades. When you do not
have a strategy each trade you make has no rhyme or reason behind it and
could be totally the opposite from one similar situation to the next. With
a strategy you should trade the same way, time after time after time, and
hopefully you will be right more often then not, or else it’s time to toss out
or tweak the strategy.
Having trading strategies will help you focus on the good trades. Think
of it like having on blinders that keep you from seeing all the garbage out
there. These blinders will only let you see situations which you know have
a good chance of working out and will keep you from acting on impulse
on others you haven’t prepared for. In my opinion trading is all about making
the highest probability trades and ignoring all the others, and without
proven strategies you cannot get that edge.
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