Finding “Your” Best Forex Strategy

Forex Basics

Finding the best Forex strategy is an essential aspect of Forex trading. Various Forex trading strategies are developed and set by successful traders to maximize the profits from currency trading.

We can’t state that “this particular” method is proven to increase the yield, as “no shoe fits all”. Each Forex trader must understand numerous strategies and then choose the plan corresponding to their trading style and risk tolerance.

Traders should focus on eliminating the trades that are risky in nature and adapting the strategies that provide more reward for the risk. This tactic will prove to be the winning one.

Forex chart with large arrow

 

How to Choose the Best Strategy?

After acquiring a little more knowledge about effective Forex strategies, the trader should choose the best one that suits him or her. Three main aspects that you should take into consideration before selecting the best forex strategy are:

  • Time Frame

Before choosing any Forex strategy, you should ask yourself, “how long are you going to trade?”. Then, you must select the trading style that gives more flexibility over the time frame. For example, there’s a big difference in trading on the 15 min chart and the 4-hour chart. Thus, the best Forex strategy depends upon the time you are willing to wait for successful trades.

If you are interested in becoming a scalper, you should monitor smaller ranged charts such as 5 or 15 min charts. Scalpers are required to focus on small currency changes in the Forex market. But suppose you are leaning towards a swing trading strategy. In that case, you are required to monitor a 4-hour chart and a daily chart to get more opportunities for successful trading. 

  • Trading opportunities

You have to look for strategies according to the number of opportunities you want each trading session. First, you should ask yourself this question, “Do I want to take a few trades or many?”. If you are willing to open a higher number of positions, then a scalping strategy would be favorable for you.

Suppose you want to spend less time watching the Forex market. In that case, you should acquire a strategy that uses larger time frames and more positions.

  • Position size

Finding the best trading strategy also depends upon the size of the position. Before choosing or adapting any Forex strategy, you should know your risk tolerance or risk sentiment. Risking more than your tolerance would lead to more considerable losses.

You should set a risk percentage for each trade. For instance, successful traders set a 1 to 3% risk for any single trade. In general, the higher the number of trades, the smaller the lot size. Similarly, a larger lot size will lead to fewer trades.

You might have identified the time frame, position size, and the number of trading you can manage in the Forex market. The most successful Forex traders use scalping, day-trading, and position trading. You can choose whichever style best suits you.

If you jump in headfirst as a beginner, chances are, you’ll drown. At Premier Forex League, we aim to help traders of all experience levels. Contact us today for questions about our membership or join now.

Give a man a pip he has a pip for the day, teach a man to pip and he has pips for life ~BR

 

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