Successful Forex Trading - Do You Only Need One Decent Trading System?

Many people spend an eternity testing out different indicators on their charts in order to try and come up with a profitable trading strategy

. Some will achieve this goal, whilst others will fall by the wayside. If you do happen to make it, can you ever be satisfied with just a single profitable trading system?

Well my own view is that although you may well have stumbled upon a hugely successful trading strategy, there is no guarantee that it will continue to generate the same kind of profits in the months and years ahead. Market conditions change all the time, and as a result of this it is not uncommon for previously profitable trading methods to suddenly start losing money.

Another important point worth considering is that if you do have a proven system in place, there may still be long periods of time when it is not coming up with any decent trading opportunities. This isn't so much of a factor on the short-term charts of course, because there should be at least one or two decent set-ups every single day, but if your trading method is based on the longer term charts such as the 4 hour, daily or weekly chart, then this does become an issue at times.

A similar problem you may face when trading a single strategy is that you are only able to trade certain price patterns. For example your system may be based on price breakouts, for instance, or it could be designed to trade quiet range-bound markets or to look for price reversals when the price of a currency pair is overbought or oversold.

Therefore by only employing a method that is based on one of these three market conditions, you are potentially missing out on additional profits when the major currency pairs are displaying other characteristics. So for instance if you already have a decent breakout system in place, it may be worth trying to develop a strategy that you can use to trade the major pairs when they are in a long period of consolidation and are stuck in a narrow trading range.

The point is that in the long run you shouldn't really be content with having just a single profitable trading strategy in your armoury. Market conditions can easily change and even if your trading method holds up, you are still missing out on other trading opportunities when your system is unable to come up with any decent set-ups.

Successful Forex Trading - Do You Only Need One Decent Trading System?

By: James Woolley

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