Forex Trading Guidelines › Guideline 11
The 9-Part Forex Strategy Framework
The 9 Parts, Defined
| # | Part | The question it answers |
|---|---|---|
| 1 | Market | Which instrument(s) exactly — EURUSD only, or all majors? Gold? Indices? |
| 2 | Timeframe | Entry timeframe and higher timeframe for context (e.g. enter M15, context H1). |
| 3 | Market context | Trend, range or breakout regime — and which session hours qualify. |
| 4 | Setup | The exact pattern/condition that must exist (pullback to level, breakout of range...). |
| 5 | Entry trigger | What precisely fires the order — a candle close above X, a touch of Y? |
| 6 | Stop-loss rule | Where the setup is invalidated — a fixed distance, or a structure point? |
| 7 | Exit / target rule | Target, trailing method, time exit, or signal-based exit. |
| 8 | Risk per trade | Fixed % (0.5-2%) and the resulting lot size rule (Guidelines 1, 16). |
| 9 | No-trade conditions | News blackout, daily cap hit, no signal, wrong session — the "when NOT to trade" list. |
Worked Example: A Complete 9-Part Strategy
Here is a finished example you can copy and adapt:
Now test it: two traders following this document should enter at the same price, or not at all. That testability is the entire point of the framework — it is what separates a strategy from a feeling.
Why 9 Parts, Not "Just a Setup"
- Measuring requires rules: you cannot journal a result in R (Guideline 12) without parts 6 and 7 defined.
- Backtesting requires rules: a 9-part strategy can be coded and tested on historical data; a "setup + gut feel" cannot.
- Discipline requires rules: the pre-trade checklist (Guideline / Checklist) checks parts 2-6 and 9 before every entry — it needs your strategy written to work.
- Automation requires rules: an EA (Guideline 18) is literally your 9 parts in code. If you cannot write the 9 parts, you cannot write the EA.
Build Around the Framework
FAQ
What makes a good forex trading strategy?
A good strategy is fully defined (all 9 parts), objective (two traders reach the same decision), survivable (risk 0.5-2%, stops mandatory), and measurable (journaled in R so expectancy can be computed).
How do I write my first trading plan?
Answer the 9 framework questions in writing: market, timeframe, context, setup, trigger, stop, target, risk, no-trade conditions. Then journal 100 demo trades against it before risking real money.
What is the difference between a setup and a strategy?
A setup is one part (the pattern). A strategy is the full decision system: context, trigger, stop, target, risk and no-trade rules around that pattern. Most beginners trade setups and call it a strategy — that is the 90% failure pattern.
Can I automate a 9-part strategy?
Yes — that is exactly what an Expert Advisor is: your 9 parts expressed as code, with extra safeguards for spreads, slippage and connectivity. See the EA guidelines page for the automation rules.
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