A trading strategy is an organized set of conditions and rules for selecting, entering, managing and exiting trades. It connects a market idea with decisions that can be applied and reviewed. A forecast that an asset will rise is only one possible input, not a complete strategy.
Turn an idea into decisions
A strategy identifies the market, time horizon, entry signal, position size and exit conditions. It also addresses when to avoid trading and how much account exposure or loss is acceptable. These choices can be executed manually or through software; automation does not establish that the underlying idea works.
For example, a trend-following approach might enter after a defined breakout and exit when the trend condition fails. The precise signal, order type and risk limits determine how that broad idea becomes actual orders.
Evaluate results in context
Historical tests can help examine a rule set, but simulations benefit from hindsight and may misrepresent liquidity or execution. Fees, spreads, slippage and applicable funding or borrowing costs affect the result.
Live records should distinguish outcomes from whether the rules were followed. Changing market conditions, losses and execution constraints can expose weaknesses even in a previously profitable strategy. A documented process supports consistent evaluation; it does not guarantee returns.