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What are the criteria of the best forex trading strategy?

May 29 • Forex Trading Articles • 486 Views • Comments Off on What are the criteria of the best forex trading strategy?

What do you think are the best Forex strategies? Are these the most profitable trading systems? Or the simplest? Or maybe the fanciest and modern?

How to find the best forex strategy? To make it profitable, simple enough to understand and use, without taking a lot of time to trade? Yes, this is what an ideal trading strategy looks like.

Today we will talk about how to find (create) your trading strategy.

Best Forex Trading Criteria

What are our requirements (wishes) about the strategy? First, the Forex trading strategy must be profitable. Profit does not have to reach cosmic figures; 5-10% per month is quite enough. Some traders like aggressive trading. They make more profits, while at the same time they risk many times more than a conservative trader.

Secondly, your trading strategy should be simple and understandable. Ideally, the essence of the strategy should be expressed simply. The more complex the strategy, the more difficult it is to trade on it – to look for entry and exit points. If the trading strategy rules are simple and understandable, and not expressed in complex and abstruse manners, then entering and exiting the market is much easier.

Thirdly, it is preferable if the strategy is conservative (consider it stable) and good money management. The principle is that the quieter you drive, the farther you will be. You can make 50 or 100% per month and then endure losing a couple of deposits for the next two months. Isn’t it better to have a stable 5% per month for a long time?

The ideal trading strategy has minimal psychological stress on the trader. Let’s take scalping and medium-term strategy as an example. In scalping, a trader trades aggressively with larger lots. The trader must quickly respond to changes in the market situation, quickly cut losses, open and close dozens and hundreds of transactions in one trading session (a couple of hours).

A medium-term trader can open 1-2 trades, set stop orders and calmly analyze the market further for the presence of good entry points, waiting for the current positions to be closed by take profit. The volumes of trading positions should be proportional. If the trader has a loss, it should be small and easily won back. The psychological load, in this case, is minimal, which positively affects both the trading itself and the trader’s health.

It is very good to use good trading robots (advisors) to relieve some psychological burdens. On the other hand, it is quite difficult to find a profitable Expert Advisor. It needs to be tested on history. Trading requires a large enough capital to pay off spending on an Expert Advisor and a dedicated server, etc.

Decide for yourself what is closer to you.

Create or copy?

Which is better – create your strategy or copy the existing one? The second option is easier but doesn’t always work. In the first case, we can be sure that we have created something of our own, something unique. But whether it will work and be profitable is another question.

In general, most traders start their journey by copying someone else’s trading strategy. There is nothing wrong. On the contrary, it is experience and practice. But if you copy someone else’s experience one to one (and any strategy is exactly someone else’s experience), then it is unlikely that it will work 100% for you. Each person is different. Each trader trades differently, and what works for one person may not work for someone else.

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