At some point or other in every beginner trader's journey, they inevitably ask themselves, “Am I using the best forex strategy possible?”
Normally, this question tends to be brought up just after a strategy they were using ended up failing on them, or they suffered a loss. Many times, it may even have been because of circumstances that really were beyond their control, rather than any mistake on their part, but it still brings about this question nonetheless.
To determine what forex strategy is best, there is only one method: Trial and error.
Truth be told, almost any (proven!) forex strategy does have the potential for profit. Some have a greater potential for profit, but these often come with extra risks attached (i.e. a greater potential for failure too). Similarly, some have a lesser potential for profit, but have minimal risks associated with them.
Which is better? Well, that’s largely up to your personal preference.
Similarly, most every forex strategy can be put in one of two main categories: Long term or short term. Being as self-explanatory as they are, they need no introduction, and the truth is that you could even develop a strategy that combines both of these two categories.
Short term forex strategies tend to carry more potential for quick and substantial profits. That said, they also carry a risk of incurring a loss if the fluctuations don’t go the way that you hoped they would. Also, these strategies require that you be constantly vigilant, and watch the market like a hawk so that you’re able to pick out the ideal time to buy, and then sell.
On the other hand, long term forex strategies tend to be more stable. Due to the fact that you’re expecting to hold onto the currency for an extended period of time, you can ride out any small fluctuations and sell it off at a time that seems most opportune to you. Furthermore, it is definitely more leisurely and requires less attentiveness.
Once again, it is a question of personal preference.
Honestly, the best advice that you will ever get is this: Try as many strategies as possible. If you can, experiment with new strategies through paper trading rather than actually risking your own money on a strategy that you’re unfamiliar with.
If it works out a number of times and you actually find that you like that trading strategy, great. If it doesn’t, well, you’ve lost nothing and can simply continue with your current strategy.
Insofar as the ‘best forex strategy’ available is concerned, don’t fall for any of the so-called advice or ‘secrets’ that claim to have a surefire, no-fail, 100% guaranteed strategy. In the forex market, nothing is guaranteed.
Keep to your routine of trial and error when it comes to forex strategies, and you’ll find that you’re not only going to be able to find one that suits you, but you’ll also be gaining a lot of immensely valuable experience in the process.