What Is the Best Forex Trading Strategy?

Traders are often asking what is the best forex trading strategy? After all, there are no shortage of choices. Nevertheless, if you do some reading about the story of some of the most successful traders, it's inevitable that the term "price action" will appear quite frequently.

The term "price action" has been coined ever since the first company share was floated on the stock market. One of the most noted stock market traders was Jesse Livermore, who became a multi millionaire in the early part of the 20th century, simply by understanding the concept of price action and using the price movements of a stock to provide signals when to buy and sell. If this isn't impressive enough, Jesse Livermore didn't even use charts and had no access to the myriad of fancy tools available on the internet today.

Today, we have freely downloadable online forex trading platorms that Livermore could only dream of, such as MetaTrader and others. These include the ability to use trendlines, indicators and other tools such as Gann and Fibonacci numbers - and even to place orders online in real time. Yet for all this, around 90 percent of hopeful traders lose their capital. This is particularly evident in the forex market where trades are leveraged at 100:1 or even higher and so while gains are magnified one hundredfold, so are losses.

For this reason, it is vital to a forex trader's success that he or she has a system, a mechanical (not discretionary) forex trading strategy that has been proven to make good profits over time. The most successful traders are those who have taken this approach. In fact, in a recent contest, one trader made 2,307 percent profit in one month. That's over 20 times his starting capital. Other close contenders made over 10 times their starting capital.

Good mechanical systems undoubtedly provide the best forex trading strategy.

The forex market is the largest and most liquid market in the world. It trades around the clock 5 days per week and provides the most amazing opportunities for a supplementary income - often a better income than your day job - for anyone willing to invest the time to educate oneself in its secrets.

Frank is the author of the popular blog Forex Trading Strategies. He has traded forex for many years and his blog contains a wealth of information on the best forex trading strategies