The short answer to this question is simply, no, there is not a 100% winning strategy, the only way that you can avoid losing is to simply not trade at all. It is actually a good thing that there isn’t a 100% winning strategy as if there was, there would be no trading as everyone would be going for the same thing. It is simply impossible for there to be a 10% winning strategy, if there was then trading would not exist, so the fact that reading has been around for so long is testament to the fact that you cannot win all the time, but surely there are some strategies that are almost right all the time? Again no, each strategy has its merits and its downsides, the person trading it has an effect, and more. We are going to be looking at why there isn’t a 100% winning strategy and also why there never will be one.
Let’s get the risk out the way straight off the bat, if you are planning on having a profit with every single trade that you make, then it would be a better and much more profitable idea to not trade at all. As soon as you plan to profit with every single trade, you are basically throwing any sort of risk management out the window and are technically risking the entire account balance with each and every trade. This is simply due to the fact that you will be reluctant to close any trades down when they are in the red, waiting for them to return, if they do not return then you will eventually lose your account. So do not go into trading with any sort of strategy and think that you will have each trade come back as a profit, losses are inevitable and they are a part of trading.
You need to accept that there will be losses and you also need to plan for them, planning for losses may sound pretty negative, but it is in fact one of the most positive things that you can do as a trader. Planning for losses also means that you will be minimising them, a planned loss will cause you to lose a certain amount of your account, say 1$% or 2% of it with each trade, an unplanned loss could be 10% or 20%. You need to plan the maximum loss of each trade, yes you will be making losses, but they are controlled and you can decide before even placing the trade, the maximum amount that you are able to lose on it, one of the primary ways that we stay profitable is by doing this, and we can technically be profitable with more losses than wins.
You may have seen people advertising their strategies as a guaranteed win or as a strategy that has a 100% winning rate, but there are a number of different factors and reasons as to why this is not the case. Simply put, no strategy can account for all market conditions and no strategy can account for natural disasters or certain news events. If the markets moved like the ocean, simply moving up and down in a predictable manner then yes, there probably would be a strategy that could win 100% of the time, the problem is that this is not how the markets move and work. Some strategies work for a few days, others for a few weeks, and others even a year, but at some point, the markets will do something that is unexpected and this will cause the strategy to start to lose.
Forex is partly about planning, but it is also about adapting, when the markets move with a natural disaster or simply go against expectations and trend the other way, you are required to adapt, each strategy has been set up for a particular scenario and market condition, as soon as that changed, if the strategy is left as it is then it will incur losses, you need to be able to adapt it to better suit the new and changing conditions. Of course, you will still be expected to take losses, especially when experimenting with changes, although that is what demo accounts are for.
So while there is not a strategy that will get you a 100% win rate, there are some things that you can do to help improve those odds or at least to improve the chances of you being a profitable trader. To start, you need to manage your money, the losses that you will take need to be managed and they need to be controlled. You need to have a set risk management plan in place that will detail the maximum loss of each trade as well as your risk to reward ratio, so you can ensure that you are more likely to remain profitable overall. The traders that do really well also have multiple strategies that they use, if you stick to one, the markets will eventually turn into a situation where you cannot trade properly with the strategy. Due to this, having multiple different strategies available for you to trade with will enable you to trade better in different conditions and be more profitable in multiple different market scenarios.
If you try to go for a 10% strategy it will only end in disaster, the first thing that will start to disappear is your account balance or equity, as trades start to fall into the red and you refuse to close them. The second thing that will start to deteriorate is your psychology, you will begin to become stressed, you may even become greedy or overconfident depending on how the trading has been going. What is important to understand is that as you try for this 100% win rate, you will begin to really feel the strain of trading, something that can be avoided by cutting losses early on, it helps to take away the stress of holding and seeing red trades as well as protecting your capital. Many traders who go for a 100% strategy and end up losing, will simply deposit more and try again, resulting in even further losses, so the best thing to do would be to accept that there will be losses from the get-go.
To summarize what we have spoken about, the markets simply do not allow for a strategy to be a 100% winning strategy, it just won’t happen, things are constantly changing and most strategies are set up for a single market condition, you should also not leave trades in the red and close them early in order to protect your own balance and capital. So don’t go out there looking for the perfect strategy, instead look for a number of different ones that can be used to help you trade in multiple different conditions, and most importantly, expect losses.