The Best Forex Strategy Ever?

What is the best Forex strategy? Or should we fisrt ask whether such thing as the best strategy exists? These are literally “million dollar questions”.

But before even thinking of the best strategy, let’s try to understand what a good strategy is. How can we define it?

The obvious answer is that good should be a synonym to winning. This is true of course, but we are afraid there is just no such thing as “always profitable Forex strategy”.

So better answer would probably be that a good strategy  is winning with 50%+ probability in some predictable market conditions. If we can’t formalize them, the use of the strategy would be questionable. An example of what we mean can be market behavior aroung a major news release. There are known patterns, e.g. price might shoot in one direction, then turn on a dime and go even further in the opposite direction.

Next, we need to find reliable numerical criteria of evaluating a strategy and so be able to compare strategies to each other and rank them.

These are the problems that we are solving on this site, and we’ve also started a specialized site devoted to trading strategies to discuss in more detail how to build strategies.

But back to the question, how can we find the best Forex strategy? To do so we need at least a broad selection of them to test and compare. How can we do it?

Breeding The Best Forex Strategy

The idea that we are going to try is to reuse the principle of evolution. Imagine that each trading strategy is a creature, and they are all exposed to hostile environment (which means we put them to the difficult tests). We can then make selection based on the test results and implement cross-mutations between the selected algorithms.

The Best Forex Strategy Selection
The Best Forex Strategy Selection By Genetical Approach

The whole process must definitely be automated. Manually we won’t be able to do much. Can we do that?

First of all, need the adequate software tools that will make it possible.

  • the strategy development framework that can efficiently generate strategies, make changes in them and merge them automatically (cross-mutation)
  • strategy testing environment that makes automated testing and selection.

We shared some more ideas here: