Best Forex Trading Strategy
How to Achieve Consistent Profits in Forex
There are two critical components to achieve consistent profits in forex. First, you need the best forex trading strategy. Second, you need to have elite discipline. Both of these components are a requirement to be profitable in forex. When you master forex, you unlock a lifetime of income potential from the comfort of your own home. The financial freedom that you can obtain by mastering forex is priceless. The following content will discuss the attributes or characteristics required of the best forex trading strategy. After explaining those essential elements, I will also discuss discipline, because elite trading requires elite discipline coupled with the best forex trading strategy ever.
Understanding The General Market Direction Better
The best forex trading strategy should help you better understand the general market direction. Understanding the general market direction is one of the most important skills you need to develop as a forex trader. Fundamentally, you need to understand what price is doing. You can’t just slap on random indicators and take reckless trades without understanding where price is headed. Once you understand the general market direction better, then you can start executing the absolute best forex setups that are aligned with the general market direction. This is a prerequisite for optimal forex trading success.
Identification of the Best Setups
The best forex trading strategy should also allow you to identify the absolute best setups on a daily basis. Quality forex trading requires the execution of quality forex setups. You can’t be scalping on random areas of a chart. You have to know exactly where you are on the forex map. More specifically, you have to understand where price is relative to major Price Levels. If you take trades at irrelevant prices, then don’t be surprised if you keep losing. It’s extremely important for you to take trades only at major Price Levels.
Moreover, good setups should be easy to execute. There shouldn’t be any complicated patterns or complicated indicators. The best forex trading strategy should be simple and straightforward to make your life as a forex trader as easy as possible. You want to get to the point where you are mechanically and objectively executing the best forex setups.
Mainly Price Action Trading
The best forex trading strategy should also be primarily based on price action trading. Price action trading is trading based solely on price without the use of any indicators. You need to understand what price is doing just by looking at the price itself. This is the single most important skill that you need to develop as a trader. However, I don’t want to discourage you from using indicators. If you really like to use a particular indicator, by all means use it. However, you should only use an indicator as an additional confluence to price action trading.
Good Reward to Risk Ratio
The best forex trading strategy should also allow you to always execute trades above a 1 to 1 reward to risk ratio. Ideally you want to execute trades with a higher reward to risk ratio such as 2 to 1. If you lose, you only lose 1 point. However, when you win, you gain 2 or more points depending on your reward to risk ratio. This means that even if you lose half of your trades, you’ll still be a successful forex trader, because your wins will outweigh your losses. Lower risk with a higher reward is smart trading. Never enter into a forex trade unless it offers you a reward to risk ratio greater than 1 to 1. This is the simple mathematics of forex success.
Set and Forget Strategy
The best forex trading strategy should also be a set and forget strategy. This means you set your trade and then you forget it until a certain time later, where you would close your trade out. In other words, you should not be monitoring your trades. What’s really important about a true set and forget strategy is that it eliminates the emotional factor of trading. No monitoring means no stress and no emotion. You set it and you forget it until a later time such as the end of your trading session. You should never just sit there stressfully looking at prices spike up and down. A set and forget strategy will help you focus on becoming a better trader and it will also help you make better trading decisions. Instead of being stressed out and watching your money go up and down, your focus can be more geared towards making objective trading decisions. Eliminating the emotion of trading will allow you to become a better forex trader.
The Importance of Elite Discipline
Equally as important as having the best forex trading strategy, is having elite discipline. Elite discipline signifies: 1) always trading with a good reward to risk ratio, 2) sticking to the same core strategy forever, 3) objectively trading without emotion, and 4) practicing to acquire experience.
The first element of elite discipline is always trading with a good reward to risk ratio. From the content above, you should already know that a good reward to risk ratio means greater than 1 to 1. If you minimize your risk and maximize your reward, your wins will outweigh your losses in the long run.
The second element of elite discipline is sticking to the same core strategy forever. Don’t make the same mistake as many traders make. As soon as they lose, they move onto another strategy, and lose again. They repeat this vicious losing cycle, over and over again, until they give up on forex entirely. Don’t place yourself in that trap. Stick to the same core strategy forever and don’t ever deviate from it. Your core strategy should be based on price action trading. You can add or remove confluences to your price action trading strategy, but you should never stop using price action as your core strategy.
A brutal truth about forex is that you will not win every single trade. That is the hard truth. You will have losing trades. You will have days where you lose. That is how the game of forex works. This brings us to our third element of elite discipline, which is objectively trading without emotion. A successful forex trader ultimately knows that there will be losing trades. That trader does not get emotional upon losing, but accepts the loss as a natural part of the forex game. That same successful forex trader also trades the same strategies objectively and consistently, forever.
The fourth and final element to elite discipline is practicing to acquire experience. Another truth that needs to be noted is that forex trading requires a tremendous amount of practice and experience. Forex trading is an art, it’s not a science. You will truly understand that saying, only after you have many years of practice and experience. Elite discipline requires you to take the best forex trading strategy, practice it diligently, and acquire the experience necessary for forex trading success.
What is the Best Forex Trading Strategy?
In summary, the best forex trading strategy should: 1) help you better understand the general market direction, 2) allow you to identify the absolute best setups on a daily basis, 3) mainly incorporate price action trading, 4) allow you to always execute trades above a 1 to 1 reward to risk ratio, and 5) be a set and forget strategy. In my expert opinion, the absolute best forex trading strategy is my Price Levels system. It’s the ultimate secret to forex and it satisfies all the attributes as outlined above.