This is one commonly asked question among my blog readers and therefore I will like to use this post to answer this question as I believe that alot of you guys out there are also having this similar question in your mind.
In fact, when I am new to forex trading years ago, I also have this similar question in my mind.
It is natural desire for a trader to constantly look for the best forex strategy to use. You guys must be thinking that there is one indicator that you can use which can make you a lot of winning trade.
Trust me, there is no one indicator that can make you a lot of winning trade. For a strategy, it is a combination of a few factors
- Selection of Forex Indicators
- Validation of trade setup
- Precise entry of trade
- Tested exit of trade
The above 4 factors are what a strategy must have in order to make more winning trades than losing trades.
Simply the right selection of indicators will not make you a profitable trader. You will need to have a way to validate a trade as there are too many false alarm signal created by the market.
You must have a way to tell whether a setup is a valid setup or not. This will help you to filter out a lot of losing trades which is why most new traders never made it in trading.
New traders are always looking for indicators and they never know a thing about validating a trade. This is something that you will never see on anybody website.
Maybe after I write this post, other website starts to tell their readers about this as they are also a reader of my blog. Most people out there are marketers who don’t know a thing about trading and therefore have to come to my website to read and then ask people to rewrite my articles to post to their website.
Being about to validate a trader is what most professional traders are doing. Therefore if you want to be a successful trader, you must have a way to validate a trade.
The entry of a trade is equally important as it will determine whether you are going to be profitable or not and therefore you must have a precise entry strategy.
What I meant by tested exit is that all your target profit must be back tested before so that you will know the chances of the price hitting the target for that particular strategy.
For all the live trades that you have seen on my blog, the 100 pips target profit are not randomly generate. I have went through 6 months of backtesting to find the optimum exit point.
As long as your strategy has the above 4 factors, I can say that you have a good strategy on hand.
However after years of trading, I realized that there is no so called best forex strategy to use in trading.
This is because different strategy works on different market condition. A strategy that works on a trending market will cause you to lose a lot of money in a sideway market and vice versa.
Therefore it is always important for a trader to have a few strategies so that he can profit from different market conditions. When the market is trending, he can use the trend strategy to profit from the market movement. When the market is moving sideways, he can use his range strategy to profit from the range market.
That is why I have several strategies in trading and if you are a student of my Forex Street University course, you will know that I have several strategies to trade with so that I can make profits in trading irregardless of the market condition.
However there are a few points a good strategy must have. I have written a blog post some times back and below is the link
One thing I want to advice all of you guys out there is that there is no strategy that wins 100% of the time. If you want to become a trader, this is one mindset that you have to adopt.
So my advice for all of you out there who are still trading without a good strategy on hand.
Try to learn one profitable forex trend strategy and one profitable range strategy and you will be able to make consistent income every month from trading irregardless of the market condition.
I hope that I have answered your question and do feel free to email me or contact me via the contact me button on the blog as and when you have any questions.
For those of you who are new, you can take a look at my blog post below