Friday, November 24, 2017

What Makes a Good Forex Strategy

March 28, 2013 by  
Filed under Fx Tutorial

In this post, I shall be sharing with you what exactly makes a good forex strategy. I believe that most of you are searching for something called Good Forex Strategy but do you really know what makes the good forex strategy to use.

I bet most of you think that a good forex strategy is one that wins 100% of the time. Therefore it is time for me to tell you the truth about trading. There is no strategy that wins 100% of the time. If you ever encounter anyone telling you that they have a strategy that wins 100% of the time, I can tell you for sure that you have met a marketer who do not know anything about trading.

After trading for so many years, I have came out with what I myself think is the criteria for a good forex strategy.

High Risk Reward Ratio – If you have been following my blog or attended anyone of my course, you will find that I emphasize a lot on high risk reward ratio.

Risk reward ratio refers to the amount of risk you are taking per trade versus the amount of profits you can make per trade. For example, if you place your stop loss at 20 pips every trade and your target profit is set at 40 pips, you have a risk reward ratio of 20:40 which is equivalent to 1:2.

Personally, any strategy that produces at least 1:1.5 risk reward ratio is considered a good strategy except for scalping strategy that usually have pretty low risk reward but high winning percentage.

For example:

You make 10 trades every month and your strategy manages to win 5 out of the 10 trades you have done. With a 1:1.5 risk reward ratio, you are still making a profit for that month.

Let says that you risk 20 pips and take profit at 30 pips.

Total Profits = 5 x 30 = 150 pips
Total Losses = 5 x 20 = 100 pips

You are still making 50 pips (equivalent to $500 if you are trading 1 standard lot per trade)

Imagine you have a risk reward ratio of more than 1:1.5 and have a winning percentage of 70%, you can be making several thousands dollars every month.

Decent Winning Percentage – Like what I have said at the earlier part of this post, there is no strategy that wins 100% of the time. Therefore a decent winning percentage is anything more than 60%.

When coupled with a good risk reward ratio, you can be making a good income every month.

Ease of Execution – Most new traders think that a good strategy must be one that is pretty sophisticated. In fact, if you ever get a chance to look at how a professional trader trades, you will be surprised by how simple is the strategy he is using.

Therefore a good forex trading strategy to me is one that is very easy to trade with and have a good number of trades every month.

Note: Do note that all the strategies that you learn on youtube are general strategies, please do not trade live account with them as you will get your account wiped out.

I have readers who told me that they lose several thousands dollar in trading and when I ask them what strategy they are using, they told me that they learn from those youtube videos.

Youtube videos is a very good way to learn trading but all the strategies taught there are general strategies that have not been fine tune yet. A portion of those videos that you see there are created by marketers trying to get you into their website to buy their signal service or course.

Therefore I will advice all of you to practice what you have learn on Youtube on a demo account first to see if it is effective before you trade live. This will prevent you from losing your hard earned money.

I have recorded a video below to share with you a trend trading strategy that works. So take some time to watch the video now.


Choosing the right course to take can shorten your learning curve by a lot. Therefore please use the tips above to rate the course that you are planning to take in future so that you will not fall into the bad hands of those marketers who are faking themselves as real traders.

I understand that a lot of you have been very cautious when looking for a forex course as there are a lot of lousy courses that are created by marketers trying to make money from those of you who are interested in trading. These people are not real traders and this explains why those strategies that they teach do not work. In fact, I have purchased several low quality courses when I am new to trading and therefore I understand your concern. You can take a look at my course but do not rush into buying it, have a feel of the way I teach in those articles and videos in this blog before you decide if this course is for you.

Click Here To Find Out More About My Forex Street University Course

Upon constant request from readers of this blog, I have started a Forex Signal Service that will help you to trade your account using 2 out of the 8 strategies in my course.

If you will like me to trade your account for you and help you recoup back your previous losses or help you grow your trading account, you can take a look at my Forex Signal Service below

Click here for my Forex Trade Copier Service

For those of you who are totally new to forex trading, I will suggest that you read through this blog post that I have written for beginners

Forex Guide For Beginners

If you are interested to learn how I do my forex technical analysis, you can take a look at the post below

3 Must Know Technical Analysis Tips



2 Responses to “What Makes a Good Forex Strategy”
  1. Luis says:

    You course is in Portuguese too?

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