Best trading strategy in the world

I am going to share with you one of the simplest trading strategies you could ever come across. This is based on the idea “KISS - K eep I t S imple S tupid”. It doesn’t involve any fancy or complicated indicators nor does it involve any complex methodologies. After reading this you might wonder why it didn’t occur to you or if this really works. I assure you that if you follow this strategy exactly as explained here and also adhere to few basic rules and instructions, you will never have a losing week or a month (there could be few losing days once in a while). So if you are ready for it, here it goes-
Simple moving average 200 (for direction)
Simple moving average 10 (for entry)
Time frame - Any. Works on 5 min, hourly and daily charts. Day traders could use 5 min charts, Swing traders can use hourly charts and long term investor can use daily charts.
Item - It can be used for any currency pair, commodity, Indices or stocks.
Long Entry - When the price candle closes or is already above 200 day MA, then wait for price correction until price drops to 10 day MA, then when the candle closes above 10 day MA on the upside, the enter the trade. Stop loss would be when price closes below the 10 day MA.
Short Entry - When the price candle closes or is already below 200 day MA, then wait for price correction until price rises to 10 day MA, then when the candle closes below 10 day MA on the downside, the enter the trade. Stop loss would be when price closes above the 10 day MA.
Limit - Profit target would vary with each item. For day traders, I suggest profit target of 50% of daily Average Trading Range of that item for the last month.
Eg - If EUR/JPY (my favorite at the moment) has daily Average Trading Range of 120 for the last month, I would suggest profit target of 60 pips per day trade.
Profit targets for other items can be worked out in similar fashion. It would be a mistake to use same profit target levels for all currency pairs. In my opinion ever currency has a different personality. It means that the daily trading range, volatility, reaction to any news, etc is different for all currency pairs.
1. Follow the instructions for entry and exit exactly as above. Don’t second guess, or assume/presume anything.
2. Avoid entering the trade when the price is temporarily above /below 10 day MA, but the price candle hasn’t fully formed yet. Enter the trade only after the price candle closes above/below the 10 day MA.
3. Exit the trade immediately when the price candle closes above/below 10 day MA in the direction opposite to the trade. Don’t remain in the trade wishing it to turn in your favor.
4. Never ever trade in the opposite direction of the market. i. e. don’t buy when the price is below 200 day MA and sell when the price is above 200 day MA.
5. Take profits when limit is reached. Don’t be greedy and keep on increasing the target. Remember - A bird in hand is worth two in the bush.
1. For forex day traders, this strategy works best in the London session as there is maximum volatility. Around 3am-11am NY time would be best time.
2. As this strategy is based on purely technical analysis, I suggest you switch off your inputs from fundamental analysis and news. Don’t allow fundamental analysis to influence the trades. Remember - Price is always right. Whatever effect fundamental analysis or News has on the currency will always reflected in the price.
3. Don’t jump into the trades. Allow time for the set up to be formed. There will always be opportunities available.
4. Leverage is a silent Killer. Don’t use excessive leverage for trading. Even the best strategy in the world will not prevent you from wiping out your equity.
5. Remember - Only 5% of day traders make money consistently. And trading strategy is not the number one reason for this. Failure to implement the strategy fully and not following the rules and guidelines is the number one reason for losses of majority of day traders.
I am attaching herewith screen shots of charts showing the entry and exit signals for different currencies and for different time frames.
Fig 1- Euro-USD chart for 14Feb 2013 showing profit of 50+ pips.
Fig 2- Euro-JPY 5min chart for 14Feb 2013 showing profit of 60+ pips.
Fig 3- GBP-JPY 5min chart for 14Feb 2013 showing profit of 50+ pips.
Fig 4- Euro-USD Hrly chart for from 22-31 Jan 2013 showing profit of 200+ pips.
Fig 5- Euro-JPY Hrly chart for from 04-15 Jan 2013 showing profit of 300+ pips.
Fig 6- GBP-JPY Hrly chart for from 09-15 Jan 2013 showing profit of 300+ pips.
As seen from the screenshots, this system is not a Holy Grail of trading, as a matter of fact, there isn’t any Holy Grail of trading strategy anywhere. Every system has profitable and losing trades. But as seen above, in this strategy, the profit from the profitable trades is cumulatively greater than the losses from the losing trades.
As a guide, I have observed that there are at least 2-3 profitable day trades in any given week(50-60 pips per trade using 5 min chart), 2-3 profitable swing trades available in a month(200-300 pips per trade using 1 hour chart) and 1-2 profitable long term trades in any given year(around 1000 pips per trade using daily charts). Using sound money management plan you can achieve return of 50-100% per year on your equity.
Thanks for taking time out to read this article.
Hope I have been able to add a little bit to your knowledge and wish all of you Good Luck in your trading!
I backtested against 10 years EURUSD and it was profitable. win rate was around 43% at 1:1.5, 213 trades with an average win of 118 pips. USDJPY was profitable but only just win rate of 30%
This is one of few strategies that actually backtested well over 10 years on Daily chart. 95% percent of strategies I see online dont come close so thanks. Not to say it will work in live but definalety something to look into.
It has also changed my view on moving averages at least for now.

The best trading strategy in the world?
If you were looking for “the best forex strategy” or “the best trading strategy” and google brought you here consider yourself a lucky person. Why you may wonder? It is not because i’m going to reveal to you such a system or strategy but I will show you how to turn any trading strategy into the best one in the world!
Month after month I see educated traders, who have been around for at least 1-2 years now and have a good understanding of what is going on in the chart to still look for the so called ‘holy grail strategy’. I understand it when I see it happening with beginner traders but it is really fascinating how a veteran trader might fall into the same trap.
Ladies and Gentlemen Traders – there is no such system because it is not the system (alone) that makes the money.
The consistently profitable trader has a good understanding of the markets such as technical/fundamental analysis. This same trader has a lot of patience and it is not afraid to skip a setup or five before the right one spears. He is also extremely disciplined, has a proven trading plan which includes solid money and risk management. He has backtested, forward tested then traded live his system and he is pretty sure it works in the long run. He trusts his system/strategy – he must. But in order to build that trust he went over all the steps above. Now when trading live and a drawdown of 1-2-4-6 trades in a row kicks in, THE trader is not worried. THE trader knows that in the long run he will make money and he DOESN’T jump to another system or strategy right away.
If one thinks about it, most people who want to be traders act illogical when it comes to picking and sticking to strategies. They start over every week or every other week. It is like going for driver’s license exam every week and every week you fail. Problem is you don’t study and practice before you go to take the exam next time, you just repeat the same mistakes over and over again.
Same happens to traders. They apply new strategy every week or every second week without learning from their mistakes – the real mistakes.
If you do what you have to do the correct way, you will have to do it only once before you start making money. It might take a few weeks or months but once you dedicate enough time to studying a given strategy, you will learn it in depth and this strategy will start bringing you money.
And what do 99% of the traders do? They switch strategies every Friday around noon. They have entered the infinity loop of “strategy hopping”. The loop looks like this:
Buy a strategy – 99$ or $999 (it doesn’t really matter in the hands of this type of traders – the results will be the same at the end). 40% won’t read the manual and watch the tutorial videos that come with the strategy AT ALL. 40% will go over the educational materials with 1 eye on facebook. And the last third will actually sit down, read/watch the materials slowly, in depth, taking notes, checking examples on the chart etc… Majority of traders will conclude that this strategy is crap by next week and start looking for another one.
How I know these numbers? Because I develop trading strategies and I see the questions that come into my . 90% of the questions asked are covered in the trading manual that comes with the strategy. 90! This is indicative of how spoiled and lazy the human population has become.
How can you spend money on something and not even check it out? I’m talking about a PDF of 15-20 pages that takes approximately 15-20 minutes to read slowly and take notes.
On the other hand if you are going to try to get your drivers license, sit down and learn for the permit. Go over all the questions 1-2-3 times if needed until you make no mistakes or you make only a few. Then go and practice to actually drive. Don’t practice 2 hours. Practice 40-50 hours. This way when you take both exams you will 99% pass.
I think you get the analogy here. When you purchase a system read and watch everything that comes in the package. First time quickly just to get an idea what is where and how. Second time start going through the materials slower. Take notes and watch the live chart etc…Yes it will take more time to master it but it is better than losing money (trading live) or to go ahead and start over by purchasing another product and learning everything from the beginning.
And let’s move on to the second part.
How to turn any strategy into the best trading strategy in the world?
There are many factors that will influence your trading performance but in here I will cover the most crucial ones. If you make sure you comply with the rules below, it will be very very hard to end up losing in the longer run.
The Holy Grail List.
Risk:Reward Ratio Win/Loss Ratio Money Management Multiple Targets General Understanding Of The Market Fundamentals.
Risk:Reward Ratio.
Stay away from setups where you don’t get at least and I really mean at least 1:2 risk reward ratio for your money. What that means is: if you are going to potentially lose (risk/stop loss) $1, you want your potential reward to be at least $2 (take profit/target).It get’s a bit complicated when we apply two targets but as a rule of the thumb remember that Target 1 should be twice as large from the Stop Loss.
Win/Loss Ratio.
Win/Loss ratio is tightly correlated to the the risk:reward ratio and vice versa. The better the RR ratio, the worse the win/loss ratio would be. That happens because if for example you are aiming for 50 pips and have a stop loss of 25 pips it is a lot easier for the price to hit your SL (it needs to move only 25 pips away from entry level) versus 50 pips that it has to go in order to reach your target.
So anytime you are running analysis on a strategy look for the correlation between these two. Assuming that there is only 1 target for your trade and you are using risk:reward of 1:2, while your win/loss ratio is 35/65 (win 35 trades out of 100) you are still going to end up with a little profit at the end.
35 trades x $2 (profit) = +$70.
65 tradex x $1 (loss) = -$65.
The conclusion here is that if you have for example a win ratio of 25% while your Risk:Reward is 1:2 you are most likely going to lose money at the end. So just crunch some numbers and see what does the math says.
Money Management.
Whatever you are going to use fixed lot or percentage of your account make sure to stick to your money management. Don’t trade fixed lots today and percentages on Tuesday.
Another important factor is to not go with too high risk. If you are using percentage don’t go over 2-3% per trade and this numbers apply only to people who have accounts smaller than $3000-4000. Money management is the heart of this operation. Strong heart means strong organism and healthy profits. Once your account grows lower the percentage.
The table above shows the effects of drawdown to your account with 2% risk and with 10% risk. So next time when you feel greedy and not following the rules of your trading plan remember this table (like the pictures they put on the cigarette packs to make you think twice before lighting up).
Huge risk per trade could be cancer for your account.
Multiple Targets.
Having multiple targets allows you to ride trends. As you probably already know the forex market is ranging around 70-80% of the time and trending only 20-30%. However when it starts moving the moves could be huge. It is always a good idea to have two targets (or 1 target and an exit plan) in order to catch such trends.
FYI: It is a common practice to set your stop loss to break even level once you hit target one.
General Understating Of The Markets (multi-time frame confirmations)
This is probably the part which is going to take most of the time and effort you put into this business. In here we are going to put things as japanese candlesticks formations, price formation (chart patterns like triangles, wedges etc), support and resistance zones, basics of Fibonacci Extension and Retracement. The list goes on and on and it never actually ends.
Up until this very I still learn something new from time to time. Just make sure to lay the foundations of your trading fort. To more you learn, the more weapons you are going to have in your trading arsenal. Believe when you receive 3 or even 4 confirmations on the same setup you will feel the excitement.
You get a sell signal and then you spot an extremely strong resistance level right above your entry level coming from daily and weekly charts. You also notice that there is a trend line coming down from the highs and on top of that this is Fibonacci Retracement 61.8% of the down move. Can it get any better than that?
I have found the “key” to my success in the Cycles. All markets move in cycles and it is very easy to spot where the price should be going next if you know how to read the cycles. This method of analysis is not a trading strategy. All it does is to show you the market direction. Then you can apply literally any trading strategy and trade only in the Cycle’s direction.
For example you spot a daily bullish cycle which has more room to go up on the Daily Chart. This is when you switch to M15 or H1 and start looking for buy signals with your favorite strategy!
Once the cycle has completed you may start looking for the reversal (sell). Cycles derive from Options (not binary options) which in other words means “smart money” or the big guys – institutional traders. If you follow what the big guys are doing, chances for failure are small.
If you are interested to learn more about the Art Of Cycle click here.
Fundamentals.
During news prices tend to react and create huge spikes which might ruin a trade as well as reach your target within seconds. However we are in the business of trading, not gambling. It is best to be prepared and know the very basics when trading.
You don’t need a degree in business economics to read the fundamentals. There are websites that have “chewed and spit out” the information for you in understandable english. You just have to know where to look for it and what to look for.
Such a website (probably one of the oldest out there) is forexfactory. On the main page you are going to see the main events that are going to take place for the selected period of time. I believe by default it will show you the daily agenda.
You can see the time, the currency that it will affect the most, the impact that it will most likely have (there 4 impact types – grey, yellow, orange, red – grey being the less important and red being super important), short description of the event, details, Actual Number, Forecast Number and Previous Number.
Thanks to those readings you can see when there will be important fundamental events and take the precautions you should take. For example if you are already in a trade you may want to close/set the stop loss to break even. If you are going to enter a trade, you might wait and do so until news are over. That mostly applies to intraday trades H1 and below.
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3 COMMENTS.
Very useful info, thanks Vlad.
Thanks for sharing, much appreciated.
you are welcome!
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BestTradingStrategy.
With these two principals leveraging off each other I was able to keep the profitable trades going and cut the losing trades quickly.
It soon was apparent that I could earn at least as much trading as I could working full time, and as I honed my skills I frequently earned far more. It must be close to seven years ago now that I gave up full time work and have been living happily off my trading ever since.
. then I should let as many people get access to it as possible. I remember what it was like when I started trading, and I know how easy it is to get scalped by those who know what they are doing. They take no prisoners in the stock market and there are no second chances.
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What I Learned From the Best Trader I Have Ever Known.
I know many traders and I have worked with many traders around the world. However, one trader who is, by far, the best trader I have ever known. He is an unbelievable trader. He is very consistent and he makes an incredible amount of money trading every day. You may have heard of him, he has been interviewed in trading books, and he often speaks at trading groups and trading seminars. I will simply refer to him as my “Millionaire Trader Friend” and I will tell you what I have learned from him.
I still remember the day that I had come to realize just how successful my Millionaire Trader Friend was at trading. Today I must admit it does not seem as impressive as I have been able to see and meet successful traders from all around the world, but I do know that he is an impressive trader and I still hold him in high regard. I have been luck to know my Millionaire Trader Friend and I have reaped many benefits from incorporating the lessons I have learned from him into my own trading. It is my hope that you too will benefit from what he has taught me.
Click here to order your copy of The VXX Trend Following Strategy today and be one of the very first traders to utilize these unique strategies. This guidebook will make you a better, more powerful trader.
These are the nine things I have learned from my Millionaire Trader Friend:
1. Do One Thing, and Do It Well.
If there is one simple thing that I have learned from my Millionaire Trader Friend, the best trader I have ever known, it is this – to make money trading you only have to become an expert at one type of trade. There is no need to run several different trading systems. You may simply concentrate on one trading system, and if you trade it well you can become a very successful trader.
You may not even need to concentrate on many different markets, you may find that simply concentrating on one currency pair is enough for you to find many profitable trade setups. This is what my friend does, he trades only the GBP/USD and he has success with this.
2. You Can Have An Extremely High Win Rate.
There has been a lot written about win rates (what percentage of your trades are profitable trades), but what some traders do not seem to understand is that it is possible to have an exceptional win rate. 70%, 80%, even 90% is possible. This I have learned from my Millionaire Trader Friend – he has an incredibly high win rate, and I do too now because I have learned so much from him.
My Millionaire Trader Friend is continually improving as a trader. He is constantly figuring out ways to get better at what he does. He uses every loss as an educational experience – that is how he sees them. Every loss is a lesson that the market has handed him. I would not say that he embraces losing trades, but he does learn from them.
3. Patience is Rewarded.
Another thing that I have learned from my Millionaire Trader Friend is that it pays to be patient. Profitable traders like my Millionaire Trader Friend wait for the perfect trade setup. Many traders who do not consistently make money trade for the sake of trading, I used to do this too. I used to look at the markets and ask myself “which way is the Pound going to go?” Now I look at the markets and say “Is there a trade I must take right now?” I have learned to be patient, and my trading account has grown accordingly.
4. The Best Time for A Trade is When Everyone Else Disagrees.
If you think about it, it makes sense – the very best time to buy something is when everyone is convinced that the price is going to fall lower, and the very best time to sell something is when everyone is convinced the price is going to shoot to the moon. My Millionaire Trader Friend has taught me the importance of trading against the crowd. The crowd is reacting to the market, and my trading partner has taught me to react to the crowd , this simple change in mindset can produce incredible profits if you are willing to look like a fool (in the eyes of others).
5. Being Wrong is Not a Bad Thing.
My Millionaire Trader Friend has taught me that even the best traders, like him, are sometimes caught on the wrong side of the market. There is no need to panic when this happens, but once it does a very good thing to do is to simply get out. Once you realize that your trade was not a good idea, there is no need to wait for your stoploss to get hit, when you know you have made the wrong move you can simply get out of the market and wait for the next trade.
This is what I have learned from my Millionaire Trader Friend – if you are absolutely certain that you made the wrong move, sometimes the best thing to do is to exit the market and then place a trade in the opposite direction. This can be extremely difficult to do, particularly if you have put a lot of time and effort into analyzing the trade.
6. Let the Trades Come To You.
If there is one thing I have noticed about how my Millionaire Trader Friend trades (and this is not a unique characteristic, many of the very best traders I have ever traded with also have this characteristic) it is this he does not go looking for trades, he waits for them to jump out at him. This may seem like a weird way to trade, but it is precisely how he takes so many profitable trades. He waits and watches, and when the market gives him an opportunity to jump in to a good situation he enters the trade. He never trades simply because the market is open, and he sometimes sits in front of his charts for hours and never trades. I have learned from him that successful trading means being ready for the market to offer you “free money” – or ideal trading setups. When these setups come along I know it because I feel like I must take advantage of the opportunity the market is offering.
7. Create Your Own Trading Style.
How many times have you heard some expert trader say something like “Fibonacci doesn’t work!” or “never trade during a news release” or “scalping is impossible in forex.” One thing I have learned from my trading partner (and from working with traders all over the world) is that the very best traders create their own trading style . This doesn’t mean that you must re-invent the wheel to become a successful trader, it simply means that many successful traders have found their way to success by adapting trading strategies and making them their own . It is not important that you trade precisely as other successful traders do, but it is important that your style of trading makes sense to you, because this will ensure that you stick with the trading strategy over the long haul.
My Millionaire Trader Friend has a completely unique trading strategy that he has created over time, by exposing himself to many different ideas and many different traders. His system is unique because it is his, and it makes sense to him. This is important because it means that he is better able to maintain confidence through the drawdowns that will inevitably occur.
My Millionaire Trader Friend has such a high win rate, and is so good at picking high probability trade setups that some people may assume that he knows that he has the markets “figured out.” Not so, he is constantly learning, he has many trading books, trading magazines and we are constantly talking about trading strategies. He learns from some of the best institutions and research centers around the world because he has a constant thirst for knowledge. The fact that he is open to new ideas and the fact that he is an exceptional trader is probably not a coincidence. I think that many successful traders are open to new ideas. This doesn’t mean that successful traders switch trading strategies every month (my Millionaire Trader Friend has been trading the same trading strategy for years), it simply means that many successful traders are open to new ideas and new ways of profiting from the markets.
9. Everyone Has a Bad Streak.
Even my Millionaire Trader Friend will have the occasional unlucky streak with several losses in a row. This is not that interesting to me, but what is interesting to me is the way that he deals with these unlucky streaks. He does not lose confidence, he continues to take the next trade setups, as they occur, and he does not question his trading strategy. He knows that anyone can flip a coin and get “tails” 4 times in a row, and that is precisely how he views an unlucky streak. He knows that in the long run he will make up the lost money and then some, so there is no need to panic.
I hope that you have learned something from my Millionaire Trader Friend, I know I have.
Walter Peters, PhD is a professional forex trader and money manager for a private forex fund. In addition, Walter is the co-founder of Fxjake, a resource for forex traders. Walter loves to hear from other traders, he can be reached by at walterfxjake.
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It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER - OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.