Which factors make a strategy good?

<p id="isPasted">Determining a "good" trading strategy is a multi-faceted question, as what works for one trader might not work for another. However, some key factors contribute to the effectiveness and potential success of a trading strategy:</p><p>1. Aligned with your personality and goals:</p><ul><li><p>Trading style:&nbsp;Does the strategy match your risk tolerance, timeframe preferences, and preferred approach (aggressive, conservative, etc.)?</p></li><li><p>Financial goals:&nbsp;Does it align with your desired returns and time horizon for achieving them?</p></li></ul><p>2. Clear and well-defined:</p><ul><li><p>Entry and exit signals:&nbsp;Are the buy and sell triggers clearly defined and based on consistent technical or fundamental analysis?</p></li><li><p>Risk management:&nbsp;Does it incorporate stop-loss orders, position sizing, and risk-reward ratios to limit potential losses?</p></li></ul><p>3. Backtested and optimized:</p><ul><li><p>Historical performance:&nbsp;Has the strategy been tested on historical data to assess its effectiveness and identify potential weaknesses?</p></li><li><p>Adaptability:&nbsp;Can it be adjusted based on changing market conditions and evolving dynamics?</p></li></ul><p>4. Data-driven and logical:</p><ul><li><p>Based on sound analysis:&nbsp;Is it founded on technical or fundamental analysis principles or simply random guesswork?</p></li><li><p>Logical reasoning:&nbsp;Can the rationale behind the strategy be clearly explained and understood?</p></li></ul><p>5. Realistic and sustainable:</p><ul><li><p>Avoids overtrading:&nbsp;Does it promote disciplined trading habits and prevent excessive, unnecessary trading activity?</p></li><li><p>Manageable workload: Can you realistically implement the strategy within your available time and resources?</p></li></ul>