The best forex trading strategy is one that tells you when to enter the market at exactly the right time right? Wrong. The truth about forex trading is that we can never be 100% sure when the perfect time to enter the market is, all we can really do is put the odds of success in our favor. So, the best forex trading strategy will be the one that puts the odds of success in our favor with as little confusion and frustration as possible. Ideally, we want this strategy to not just blindly tell us when to enter and exit the market, but to provide us with our own market perspective, or way of thinking about the price movement, that we can apply each time we analyze the market.
By using a trading strategy that allows you to develop and refine your own way of thinking about and understanding price dynamics in the forex market, you will be able to trade in a way that makes sense to you and that allows you trade with confidence and conviction. This strategy should also be easy to understand and use, and does not need to be overly complicated. Many traders naturally gravitate towards such overly-complicated trading strategies or systems that require them to make use of multiple indicators or software programs, these strategies are usually more trouble than they are worth. So, we have a few points that we can now emphasize that should be present in the best forex trading strategy:
• Clearly presents an “edge” that puts the odds of success in our favor.
• Provides a unique perspective or way of thinking about the market.
• Not complicated to understand or difficult to implement.
The important thing to understand about all forex trading strategies is that they are only a piece of the overall puzzle of forex trading success. Even with a trading strategy that wins on say 80% of your trades, you could still lose money over time if you do not manage your risk effectively and manage your emotions effectively. Most traders actually do find solid trading methods, but most traders also lose money, and the deciding factor here is that they simply over-trade their method and / or they over – leverage their trades. There is a whole host of things that you can do while trading that will induce emotional trading, and emotional trading is the downfall of any forex trading strategy, no matter how accurate it is.
So, this begs the question, “why even worry about the trading strategy?” and the answer is that you need to have a trading strategy because forex strategies can indeed put the odds of success in your favor. The thing to clarify is that they are never 100% in your favor on any ONE trade; many traders seem to forget about this. So, it is wise when searching for the best forex strategy to look for one that teaches you to read the price charts in a logical, simple, and effective manner. There really is no need for fancy “bells and whistles” all over your charts or anything of that sort. Just stick to simple yet effective trading strategies that allow you to concentrate more of your mental energies on managing risk and remaining objective, rather than trying to figure out the strategy you are using.