Preliminary requirements for all forex trading strategiesThere 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 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 a nifty little piece of software called Forex Tester 2. It has been specifically designed for this purpose. read more about it here. When you find some recommended trading strategies, just test them out on 'Forex Tester 2' 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 Ed Burke's trading system, he won the CNBC's Million Trading Challenge! He finished ahead of 254,000 other traders. This system is listed on the world's best trading systems section. Read more about the system here. Free forex strategies An excellent place to find different strategies and idea's is Edward Revy's "Forex-Strategies-Revealed.com"; Visit Edward Revy's site, www.forex-strategies-revealed.com Edward's site has a HUGE selection of trading strategies;
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. Forex Day Trading Advantages Of Forex Day Trading, click here Swing Trading Currencies For a look at a swing trade strategy, click here Return to Home Page from Forex Trading Strategies
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