If you are a novice trader, you probably have already tried to find a Forex no-loss system – a proven strategy that results in zero losses.
You are not the only one.
There are thousands of traders who are on the lookout for an easy trading system that reliably delivers profit. The quest for the best Forex no-loss strategy is a never-ending one. Some traders even claim they have discovered the secret.
Does such a perfect strategy even exist?
Here's a hint: Admiral Markets offers insightful live webinars, but a no-loss strategy isn't on the syllabus.
We're going to reveal the cards right away. There is no such thing as a trading strategy that never results in losses. It's not that nobody has ever thought of one – the truth is that a strategy focused on the Forex market cannot be a no-loss strategy.
The only reason you were not able to find such strategy is because it simply does not exist. Even if it did, the trader who discovered a tested Forex no-loss strategy would probably keep it to himself.
The point of any strategy is to deliver profits that are higher than the total amount of losses. The frequency and volume of profits depend on your own skills, knowledge and tactics, while losses are inevitable. Some of the tools that professional traders use like indicators or oscillators can raise the chances of gaining profit, but it's never guaranteed.
Should you give up, then?
Don't be so quick. Rather, focus on learning how to make a realistic Forex strategy because in Forex, a no-loss trading strategy only means a waste of your time.
A trading strategy is a combination of actions that allows traders to establish entry and exit signals for their positions. It is important to remember that each strategy may also have its own false entry and exit signals. Traders will usually only be able to tell them apart when they have enough experience with that strategy.
Even so, a certain entry signal within a strategy does not always mean a winning position.
With every trading market – whether it's stocks, futures, options, currencies, etc. – there is always risk. And with risk, comes the possibility of losses. The key to successful trading, then, is efficient risk management.
While there is no such thing as a no-loss Forex system, it might seem like some expert traders have discovered the secret. There are traders who have a high win ratio and can reliably execute profitable trades.
You may feel tempted to copy their methods in hopes of gaining similar results. However, these results are the outcome of hard work, skills and experience gained over the years.
Even if you were to make some good trades by copying the expert traders, you would learn nothing.
As a beginner, you should be especially willing to try out new things and plan out your own trading strategies. First of all, it definitely helps to know your trading personality.
At the very least, you have to take into account three questions:
Practising with a demo account can help you answer these questions.
Another important thing to remember is that no good strategy stays the same. Financial markets behave like living beings – the markets constantly move and change.
There are many factors influencing the fluctuation of the markets – from large investment banks, hedge funds and prime brokers to government policies. Because of that, even a correctly made prediction may backfire due to the latest political development.
As such, you need to constantly work on your trading strategies.
It's not enough to gain profit, you have to understand why it was possible. What beginner traders call luck, professional traders consider the results of many years of practice.
The path to success means you never stop learning. Learning the basics of Forex trading is the logical start.
The concept of a perfect Forex strategy is very captivating. In reality, there is only one way to no-loss Forex trading – avoid trading entirely.
By nature, FX trading has always been synonymous with risks. If you are not open to the idea of sometimes taking losses, then financial trading is definitely not for you. Like any other activity, mistakes in trading are valuable for improving performance.
The good news is, there's already a perfect tool for learning to manage risks without exposing yourself to losses – the demo account. If you sign up for a demo account, you can test which Forex strategy suits you best – without touching your bank account.
In a way, demo trading is the Forex no-loss trading system you were looking for.
If you want to become successful at Forex trading, you need to keep in mind one thing. There is no easy alternative to discipline and patience.
If you continue thinking of FX trading as a pastime or a quick way to riches, you won't go anywhere. Forex trading can be profitable but your results will always be accompanied by risk – and with it, the chance of potential loss.