Preliminary requirements for all forex trading strategies
There are about as many forex trading strategies as cars on the road. As discussed under analyzing the best trading system, these rules apply for a good trading strategy.
The maths behind the strategy needs to be in your favor. ie win/loss ratio (accuracy), win/loss size ratio (amount won vs amount lost) and also provide sufficient opportunities to trade it.(Number of trades in a given time period).
In other words the systems profit target needs to be greater than its stop loss on each trade assuming it has a 50% accuracy. If it's accuracy is extremely high like 90%, then we can even have it's stop loss levels larger than its profit targets.
If the systems accuracy is low, like say 40% correct, it will mean that the system needs to have a higher win/loss size ratio. (ie Larger profit target vs stop loss amount).
Different system ratio's can still produce good results as long as they all work together. Its all a matter of finding the best combination of accuracy, win/loss size and trade frequency.
For a detailed discussion on maths behind the best trading system visit here.
The trading method also needs the correct money management. For more information on the importance of money management go here.
The strategy also has to fit your available time to trade and your personality. See the importance of psychology read more.
Remember for a strategy to be extremely successful we need all those three essentials to be correct. 1.Maths behind the strategy 2. Correct position sizing (money management) and 3.Be in control of our emotions such as fear and greed. (Psychology).
Experts agree to keep the strategy simple
Most trading experts agree that a good trading strategy should not be overly complicated. As a general rule they say the use of up to four indicators or triggers are about the most you will require to trade with a high degree of success.
To test different trading strategy idea's, there is software specifically created for that purpose. Read more here.
When you find some recommended trading strategies, just test them out on the simulators first and see how they perform. Usually you will find that you can combine some good strategy idea's and in effect build your very own system.
Where can you get some forex trading strategy idea's?
You can always purchase a successful strategy from someone whom has a proven track record. For example take a look at recommended systems here.
Free Forex Strategies
Casey Stubbs from Winners Edge Trading (WET) has released his own personal forex trading strategy. He calls it the 'forex catapult'.
He shows how simple the strategy is in his free step by step training video.
It works best in trending markets and has achieved 3123 pips in 8 trades.
As Casey's strategy is mechanical and straight forward it has been coded into an automated trading system / forex robot expert advisor. Brainyforex is currently testing the basic free version here.
He gives away the free version to prove that the strategy works. It is limited to only one currency pair EUR/USD 4 hour chart. After traders gain confidence they can upgrade to the paid version and trade multiple currency pairs.
More free forex strategies
Brainyforex has compiled a list of free trading systems here.
Another excellent place to find different strategies and idea's is Edward Revy's "Forex-Strategies-Revealed.com";
Edward's site has a HUGE selection of trading strategies;
simple strategies
complex strategies
advanced strategies
strategies under development
You are welcome to forward a strategy to forex-strategies-revealed.com that you are working on so as to receive free assistance and feedback for improvement. Or learn from those developing these new strategies.
There is also a growing collection of forex trading strategies here at brainyforex. At the free trading strategy section, free trading systems.
Scalping the forex markets with different forex trading strategies
How do you scalp the market for profits? What is scalping? Find out how it works here
Lance Beggs from yourtradingcoach.com Explains basics of a trading strategy In short video below
Lance also offers a full trading strategy course called
YTC Price Action Trader.
I highly recommend learning how to trade properly through a course as comprehensive as this one. Visit the site and take a look at its table of contents.
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Lance has got it
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Some people have a gift in being able to explain things to others. WOW! Lance has this ability. I am very impressed that he also has the keys to the kingdom....
