Many times, beginners in forex trading wonder if they are using the best forex trading strategies available.
In most cases, this question is often raised just after a strategy they were working with ended up failing on them or they suffered a loss.
It may even be due to circumstances that in some way were beyond their control. Instead of any mistake on their part a trading system can fail, leading to traders questioning themselves.
To find out what best forex strategy is best, there is just one method: Learning from mistakes
How to learn from your mistakes while trading forex?
Just about any forex strategy comes with the opportunity of profit. A few strategies have a greater possibility of profit. But it often includes additional risks, i.e. an increased possibility of failure too. Similarly, some trading strategies have a smaller possibility of profit, but have minimal risks related to them.
The majority of forex strategy may be placed in one of two main categories: short term or Long term.
You could even create a strategy that mixes the two of these categories.
Short term forex strategies tend to carry more possibility of quick and huge profits. Nevertheless, they come with a risk of incurring a loss. This is true if the market fluctuations don’t go precisely as you expect. Furthermore, these strategies need that you be consistently vigilant, and monitor the market so that you can pick out the perfect time to buy and sell.
Long term forex strategies will be more stable.
Because of the fact that you’re hoping to hold onto the currency for an extended time period.
It is still possible to ride out any fluctuations and then sell it off at any given time that looks most opportune to you. Moreover, it certainly is more leisurely and needs less of the trader’s attention. This is a question of personal preference and can change from one trader to another.
Test a few forex strategies
The best recommendation that you will ever get is this: Check out as many strategies as you can.
If possible, experiment with new trading strategies by demo trading instead of risking your own cash. Keep this in mind if you are trying out a new trading strategy that you are not familiar with.
Depending on your tests, if the strategy works out numerous times, you can think of taking it to the next level. You may find that you like a particular trading strategy. This is good!
If it doesn’t, well, you have lost nothing and can continue with your next trading system.
Please don’t fall for one of the so-called advice claiming to have a guaranteed, 100% guaranteed strategy, no-fail. Inside the forex market, absolutely nothing is guaranteed.
Stick with your routine of trial and error in terms of forex strategies, and you’ll discover that you’re not only can find one that fits you, but you’ll also be getting a lot of valuable experience in the process.
You will find different trading strategies based on the chart types too. For example, you may find one strategy that works with candlestick charts, while another may work with renko charts.
Finding the Best Forex Software and Start Trading!
Since the forex made available to public, you can find a ‘boom’ of sorts relating to forex software.
Basically, these are the software programs that work as trading stations and make it possible for individuals like you and me to trade currencies and make lots of profit along the way. For this reason it is not difficult to guess that you need to use the best forex software available on the market today!
Even so the real question is: What would the best forex software have?
In case you don’t have in mind the answer to this, regardless of how many forex software programs you tried you’d most likely not be able to distinguish between them. Since there are a large number of different alternatives on the market, getting one that ‘stands out’ can be a bit of a task, especially if you don’t understand what you should be looking for.
Let’s check it out of what you need to think about in terms of forex software:
1. Signal Software
Essentially, this kind of software program is the one most often found. It is a software that monitors the forex market followed by ‘signals’ the user when they can sell or buy currency.
In most cases, the signals on their own are usually quite accurate. The downside is that you must access your laptop or computer to make the purchases or sales.
2. Expert Advisors
One step up from signal software, ‘expert advisors’ are great pieces of forex software that basically take care of the placement of orders automatically. You can be helped by orders that can be placed even when you are not at your Computer.
However, this kind of program will reduce your own control over your investment funds and lots of skilled forex traders avoid this type of software because of this.
Should you haven’t already noticed, the option that you face relating to forex software comes from a basic set of options and that is:
- Do you wish to control all sales and purchases, or
- Would you prefer it to be automated.
This is a matter of preference. Mainly because you are likely new to this, you may want to have an automated software which enables learned decisions for you to start.
3. Back testing your strategy
Under all circumstances, you must backtest your trading strategies. This means you should test your trading systems using historical data and forward test your strategies as well. This method ensures that you are thoroughly testing your method. Failure to do so can lead to costly mistakes later on.
To achieve this, you need a good demo trading account. But a forex demo account is only possible for forward testing your forex strategy.
To backtest for historical data, you need a good back testing strategy like forex tester.
Learn to back test your forex strategy
Building up a forex strategy
After you figure out the inner workings of the forex market, you can start working on something more hands-on.
Alternatively, you might simply want to begin with a less automated version. This is because it will encourage you to learn faster. Try using a forex strategy that is simple to understand. It should not have too many triggers. This way, trading is based on simple buy and sell rules.
This will be a great practice for traders to understand how to trade the forex markets in real time.
Finally, it’s your choice, however when you are looking for the best forex software, this is exactly what you have to be considering!