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Thread: How to Make a Forex Trading Plan

  1. #1
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    Default How to Make a Forex Trading Plan

    Having a Forex trading plan is one of the key elements to becoming a successful Forex trader. Many traders never even make a trading plan, let alone use one regularly. It’s very important that you do both; make a trading plan and use the one you make…don’t just make one and then never look at it like many traders do. Here are some important points to consider regarding Forex trading plans:

    • Follow a plan, have a journal, log trades
    You need to do three essential things to become and remain an organized and disciplined Forex trader. These things are the following: 1) Create a Forex trading plan, 2) Create (or use an existing) Forex trading journal, 3) ACTUALLY use BOTH of them.
    The process of creating a Forex trading plan around an effective trading strategy like price action trading, will work to solidify your understanding of the trading strategy and will also provide you with a blueprint for what you need to do each time you interact with the market. Having this market blueprint is essential for developing the type of ice-cold discipline that it takes to succeed in the Forex currency market over the long-term.

    Logging your trades in a trading journal is critical to your success because it allows you to have a visual representation of your ability (or lack thereof) to trade the markets, it also creates a track record for you that you can use which will show you how your trading edge plays out over time, this will allow you to ‘tweak’ and adjust your trading strategy as you see fit.

    • Trading plans contain a routine and check list
    To put it simply, you NEED to have a routine in your trading activities; otherwise you will just end up running and gunning the seat of your pants. I have a trading philosophy that revolves around trading Forex like a sniper and not a machine gunner, if you want to trade like a sniper you have to have a routine that you follow, and you have to be disciplined…a sniper in the military is an extremely disciplined individual, and you need to think of the Forex market like it’s a war, and you are a sniper trying to take only the ‘easiest prey’; your ‘prey’ in the markets consists of only the most obvious trade setups.

    Your trading plan should include a checklist that you follow; this will include things that you look for in the market and what you want to see before entering a trade. If you can tick all the boxes then you enter the trade, if not then you hold off until your trading edge appears again. You can actually formulate your whole trading plan as a checklist; this will make it a smooth format that allows you to quickly decide if any potential trade setup is worth taking.

    • Trading plans contain written guidelines of what a trader will do and look for as well as images of trade setups
    Your trading plan should contain a written description of what you will do in the markets. This includes things like what your trading edge is, how you trade it, when you trade it, what time frames you trade (I prefer daily Forex chart trading), your strategy for risk management and profit taking, and your overall goals as a trader. You should also include images of your trading edge setups, so that you are constantly reminded of what an “ideal” setup looks like. Eventually, after you follow your written guidelines and “ideal” trade setup images long enough, you will burn them into your brain to the point of knowing exactly what you are looking for in the market, which will work to build your confidence as a trader.

    • Trades planned in advance and ‘anticipated’ work best
    One of the main reasons to create a Forex trading plan is because pre-planning your trades and pre-determining what you are looking for in the markets is the best way to profit over the long-run. You will never be more objective and calm then when you are NOT in the market, so if you can plan out all your trades when you are not in the markets, you will be totally uninfluenced by market variables when you are in a trade, and this will work to protect you from becoming an emotional Forex trader.

    • Be patient and wait for the conditions of a plan to unfold – don’t force the issue
    Patience is perhaps the most important virtue that a Forex trader can possess. When you are a patient trader it means you know what you are looking for in the markets and you wait for your trading edge to appear before you execute a trade. Trading in this manner eliminates many losing trades that are the result of trading emotionally…or without patience. A large part of trading, and perhaps the largest part, is simply waiting for an “ideal” price action setup or other trade setup to form in the market. Traders who don’t wait for an ideal setup to form, end up losing their money quickly because they negate their trading edge and are simply gambling instead. Make sure you stress the importance of patience in your trading plan, this way you will be reminded every time you read it why being a patient trader is so important to making money in the Forex market.

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    It's not easy to make trading plan because we need trading experience to make plan. We should know about forex trading and understand about market forex. We can try to use demo account to start trading in forex. Even, until now, i also still use demo account in tenkoFx.

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    plan is a very important thing in this forex trading. to have a good trading plan then we will be able to minimize trading greed. in this forex greed is a bad thing for our trading, the trading greedy then we are going to experience a loss in forex

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    Quote Originally Posted by Lucien View Post
    plan is a very important thing in this forex trading. to have a good trading plan then we will be able to minimize trading greed. in this forex greed is a bad thing for our trading, the trading greedy then we are going to experience a loss in forex
    We must have plan. we must have experience to be able to make a plan for trading in forex. Without any experience, we will not know how about forex and how to undergo it. We also must discipline with our plan if we want to earn more maximal result in forex

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    Quote Originally Posted by CahCuncun View Post
    We must have plan. we must have experience to be able to make a plan for trading in forex. Without any experience, we will not know how about forex and how to undergo it. We also must discipline with our plan if we want to earn more maximal result in forex
    To get trading plan we need trading experience. I think here is the advantages of demo account in forex. We will be able to learn about forex trading and we will know how to trade well in forex trading. And when were are still new in forex, forex training from Freshforex also can be maximized
    Last edited by Lucien; 02-06-2015 at 15:11.

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    have a trading plan in forex trading is very important, because with a trading plan that will allow us to trade with the maximum. Therefore, we need to learn and practice many trading well in order to minimize the risk of forex trading plan and support us

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