Does The Perfect Forex Trading System Actually Exist?

By: James Woolley

It's a well-known fact that many forex traders spend much of their lives seeking out the perfect forex trading system. With so much money to be made, particularly if you make full use of leverage, it's hardly surprising, but does this perfect system actually exist?

Forex forums are full of newbies asking about the best trading systems and how they can start earning lots of money from forex, but they're usually brought back down to earth by the other more experienced forum members. This is because there is no such thing as the perfect forex trading system unfortunately.

On these same forums you will often read about the latest and greatest forex systems but almost all of these systems eventually end up failing, despite initially looking profitable. It's the same story with many of the commercial systems available online. They all have very impressive track records and look like very impressive systems on their sales page, but when you come to buy them, you quickly discover that they aren't anywhere near as profitable as they claim to be. This is hardly surprising of course because if these systems were so profitable then they wouldn't want to sell them to the general public.

The simple fact is that there is no perfect system. There are lots of systems that are capable of making a profit in the long-run, but even the very best systems will go through low periods and incur some losses in the short-term.

The key to being successful is to develop a system where the odds are in your favour for every single trade you make. This can be achieved by combining certain technical indicators so that you only enter positions where all your chosen indicators point in the same direction, so you can be confident in entering a long or short position.

You don't necessarily need to trade a system with a high success ratio either. You can make decent money from forex trading just by developing a system with a 30 or 40% win ratio, for instance, if you have a solid stop loss policy and let your winning positions run.

It basically comes down to probabilities. If you have probability on your side for every trade you make then there's no reason why you shouldn't make money from forex trading. You don't need to constantly be on the lookout for the latest and greatest trading system. It's very often the simple tried and tested systems that are the most profitable in the long run.

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