Is There a Best Forex System Trading Program?

What is the best forex system trading available? If one were available in the market, would you be able to recognize it? Better yet, would it be the best one for you and your personal trading proclivities? The answers to these and other questions are best sorted out before you begin looking for a forex trading system. And there's no way you can even begin to answer these questions without knowing about forex trading and how that market works.

Let's examine the basics of forex system trading first before attempting to find that mythical "best" trading system. The reason it is referred to as "system trading" is because such a trading approach is based on systematic trading principles. Those principles include having a set of predetermined trading rules which define how you are going to trade. Having rules that you can abide by and live with helps take the emotional factor out of the trading.

Today's sophisticated forex trader generally works with a set of pre-existing rules which allows him to get as close to an unemotional trading stance as possible, so that he won't foul up his own trades. Some of those rules might include: preset guidelines for the entry and exit of a trade, rules for money management, compounding rules, when not to trade guidelines, and the monitoring of various other market data which might telegraph a substantial move in the market.

Of course, the trading principles may vary with the type of system one is using. Trading systems tend to fall into one of two broad categories. Either they are "trend following systems," following an upward or a downward movement in the market, or they follow a "counter-trend trading system," going against the trend.

There are pros and cons when considering each of these types of systems. And the best of traders utilize both systems depending upon the market's conditions. In other words, these savvy traders are able to determine when the market is either trending up or trending down or whether it is consolidating. Generally speaking, when markets consolidate, counter-trend trading systems excel in making short term, quick profits, whereas trend following systems in such market conditions can tend to be whipsawed, creating more losing trades than winners.

You have to remember that there will be times when the market is simply unprofitable, and being able to identify those conditions and staying on the sidelines will preserve your investing capital. If you can overcome the three main reasons that cause many to fail in forex trading, you can be on the winning side of the ledger. Those three causes for failure are: fear and greed, over trading, and late entries.

So, when looked at realistically, there actually is no "best" forex system trading program, since the most advantageous of trading circumstances depends upon market perceptions and conditions. If you can recognize these kinds of statistics, then you can be on the winning side of the majority of your trades.