Traders have been in debate to what the best Forex trading strategies are for years. That debate is likely to continue for many more years to come. What most people that are new to Forex trading want to know is what is the best and how can we identify it as the best. I want to first of all consider what a trading strategy is then look at two different types and asses them both.
A Forex trading strategy or system is simply a set of rules a trader will use to enter, exit and adjust his trade. The strategy may consider fundamental analysis, technical analysis or a bit of both. The answer to which is the best cannot be determined by simply looking at the results of a strategy but by looking at the trader as well. Psychology is the single biggest issue traders’ face when carrying out a winning or losing trade. The ability to be able to stick to your own rules during a losing or winning trade can be challenging. It is for this reason many traders will turn to automated trading systems to beat the psychological issues they are faced with. Auto trading using EA’s has its benefits but it is a proven fact that markets are in fact random which means a strategy working today may not work tomorrow.
What about a mixture of both?
You could be the best analyst in the world and still be a terrible trader! How many times have you taken a trade with all your analysis in your head then exited early or not taken the trade at all. A common scenario is not taking the planned trade because you couldn’t commit then taking a random trade that wasn’t planned and losing. Sounds ridiculous when you read that scenario but it happens every day.
Imagine a system where you could use your own analysis to set up a trade then use a trading system to take over and carry out your settings so you didn’t have the Psychology to deal with. Surely this would be the best Forex trading system. The good news is these trading systems are about but not many people are giving them away. You could however have a program coded for you that takes trades based on your rules and eliminates the psychology. If you have a system that works on a manual basis but only works with certain market conditions then this could be the best Forex trading strategy.
by Adam Woods