Trend or Range?

Ask yourself the following questions to plan your trades and to come up with a system?

Market has different phases, and different strategies are made for different phases. If the market is trending up, your ranging strategies won't work and vice versa for the trending market.

So your first step should be to determine if the market is trending up or down, or if it's a sideways (choppy) market. This step is a pre requisite to which strategy you use. Break out will work when the market is a choppy market, buying a pullback will work when the market is trending.

If the market is trending, how do you know if there's going to be a pullback or a reversal? If you are using Fibonacci and it's a pullback, how do you know which fibonacci level the price will hold? Some people may use candlestick patterns (which does add odds to your favour), some people may use indicators.

Do you prefer naked charts and price action or do you prefer indicators, people suggest that price action is best but is it? I don't agree, I have spent long time studying both and traded both, you can't say one is better than the other, keeping your system simple is best but what really matters is how you make money? If you know which kind of a market is it, and you use the right strategy, everything works.

Moving Averages are a lagging indicator but if it the market is trending, they are pretty good, and yet when the market is choppy, it simply doesn't work.

Or you could use price action to determine your trade enteries and indicators to confirm. These questions are really important because for consistenty, you need to trade the same system over and over again, you can't keep changing your systems every other week, you could write a journal and learn from mistakes. How did people find out the moving averages work in a trending market and not in a choppy market, by a journal and backtesting.

I hope you analyze the above questions before you start trading. Also, if you have a full time job, do not leave your job, until you have started making money consistently for atleast a year and you have enough funds to survive.