Looks like people are really interested in searching for a consistently profitable trading strategy. I know, I used to be there, looking for the best trading strategy. However, finding a profitable trading strategy isn't some sort of secret activity. In fact, it should be one of your last problems as a trader.
The question I was asked to answer goes like this:
Is it possible to have a consistently profitable trading strategy when it comes to Forex?
There I came with my answer…
A Consistently Profitable Trading Strategy
In the end, all trading strategies have awesome moments and…drawdowns. The only person that will make your trading strategy consistently profitable is yourself.
Let me explain…
You could go in the market and trade. We'll make it simple by assuming you trade only one currency pair.
If you can find a way to predict a movement in the price of say 100 pips (some sort of indicator or price action), and then set a stop loss of 50 pips, you only need to be right 33% of the time to break even. If you're right more than 33% of the time, you'll have a consistently profitable trading strategy.
Theoretically, this is better than doing anything. The reason is that by doing anything in the market, you'd have 50% chance of being right about the direction.
Having a way to predict where the market is going is an edge. It doesn't mean you'll be right. It simply means that, based on past data, you were right most of the time.
Watch: How To Make $100-200 A Day From Forex (Required Account Size)
But what does it means?
In the end, having a consistently profitable trading strategy comes down to how/when you close your trades. By the example above, you'd have to let your trades run until they hit your stop loss or your take profit.
And that's it!
To take into account:
I'm not saying you'd be winning money from day #1. That would be a real life. In fact, you'd have to trust the Law Of Averages to do its work. Over a large number of trades, you'd most likely be profitable. You have to let time play in your favor.
The #1 problem…
People usually get attached to money and losing several trades would completely change their mindset.
The other thing is that many people, after seeing a few losses, would start to get fearful. Don't be one of those people
Read: Overcoming The Fear of Trading
What are you going to apply from this article? Comment below and let's keep the conversation going!