Writing a Forex Trading Plan

Forex strategies

I must admitI turned into a prosperous trader with no trading program. Additionally, I conducted this website for two years with no strategy. And within my own life I aim to nothing whatsoever. I thought that plans were so unworthy and I didn’t desire them…. I had been defame!

Your Forex travel is likely to soon be many simpler and many more lucrative when you get a suitable plan in place. But, not many sites tell people just how to building a trading program. With no internet site I know about actually teaches you a good instance of a REAL trading program.

The simple fact is I can offer you a 1000 page essay about which a trading program is and how to publish one. But, wouldn’t it be so many easier if I just show you actual plan?

A small disclaimer before all else though. As most of you know I am a self-taught trader I did not learn Forex from a book. So this is a NickB type Forex trading plan it’s not something you will learn in a book.

First let’s go through what’s you need in a trading plan the check out this sample plan (opens in new window) to see how it all comes together.

My current plan is written on paper as opposed to typed on PC. There are many conflicting studies on whether people retain more knowledge typing or writing. Personally I feel that I retain many more knowledge when I write something. You should try writing your trading plan. It is more work but at the end of the day if it helps you retain knowledge like it helps me IT’S WORTH IT!

Step 1: Write a quick outline of your trading method/system

No surprise here, your trading method is what it’s all about. Without the foundation of a good method/system trading becomes gambling.

The before all else part of your trading plan should have a brief outline of your trading methods/system. It should contain:

  • The pair(s) you trade.
  • The timeframe(s) you trade.
  • Types of cost action analysis (if you use it) i.e. Candlestick analysis, trend line analysis.
  • Indicators (if you use them) i.e. MACD, RSI.

Step 2: Write a quick outline of your Money Management Plan

Here you would put a brief summary of your money management plan. In my previous post I showed you how to right a money management plan. In your trading plan you should just put in:

  • Your money management goals.
  • Your money management rules.
  • The table with your pip goals.

Step 3: Add your trading goals

Here you would put your goals. And no “I would like to become rich” is not a proper goal. The best way to figure out your goals is to ask yourself “exactly what exactly do I wish to obtain free from trading? “. If I ask a newbie trader what they want to obtain out of trading most would say something like…

“Freedom, I desire to quit my 9 to 5 job and also exchange it with Forex trading. “

Now that is a pretty good goal and it is definitely achievable.

With goals you can aim for the sky and be disappointed when you don’t obtain there. Meaning , you could throw at a dumb goal such as “I want to be a millionaire in 12 months” and start to become defeated once you aren’t. It is better to throw in a logical, achievable and simple goal.

When I was a newbie my list of goals would have been something like this:

  1. Get disciplined, taking random trades without analysis is stupid. Analyze all your trades beforehand and think things through before opening a trade.
  2. Get to the point at which you can take a trade without stressing over its outcome.
  3. Make enough money consistently to move out of mum and dad’s house.

The goals are logical, achievable, simple and to the point. 5 years later trading has made me a millionaire -to clarify trading alone did not make me a millionaire, it was the smart investing of the money I earned from trading that did that-.

Step 4: Add a list of your weaknesses

We all have weaknesses. For example I am too smart and too good looking hahhaha…. but seriously, I tend to be impulsive and I always want to take on more work than I can handle.

I put my weaknesses in my plan to constantly remind me about them. Knowing my weaknesses helps me combat them. You will be surprised how quickly you forget your weaknesses if you don’t write them in your plan.

Your flaws are what’s going to block you from attaining the aims previously. Therefore writedown the flaws, keep them and fight .

Step 5: Add a few rules

So that you have your objectives as well as your flaws.

Now it’s the perfect time to throw into certain rules which will assist you to combat those flaws and reach those aims! The guidelines are clearly specific for you along with your own trading therefore I can’t tell them. But, a good illustration that’s remained constant within my own trading arrange for decades is trading. Certainly one of my flaws is when I create volatility I need more and longer. I continue shooting more trades and I wreck up it. I used a decree ago that problem:

Rule 1 – Target a max of 100 pips each week. In the event you’re within a open trade and it moves within the 100 pip target maintain it available and trade it because you would ordinarily. But once that trade is locked trading has ended for weekly. Even in the event that you obtain yourself a 100 pip trade on the very before all else hour of trading Monday morning afford other week .

I used this decree into my own trading for decades and it’s helped tremendously.

Step 6: Write a Simple pattern
Here you’d lay your trading out regular. You might get this to section 10 pages if you wanted however, mine is obviously merely a couple of bullet points. All you have to do is place in basic summary of the best trading pattern. Without you might discover you don’t have any leadership and change objects randomly. This will remind one of one’s path and follow along. Ideally you’d like to publish something in this way.

  1. My trading week starts Sunday before marketplace available. I ought to spend approximately a hour doing my entire investigation and preparation my own trading to the forthcoming week. I ought to also place alarms that are applicable.
  2. Monday I should be watchful to trades however I should keep attentive as Mondays are sometimes somewhat tough to trade.
  3. Tuesday-Thursday I have to be investing in regular plus watching the graphs closely. That really is best trading period.
  4. Friday is a half a day. I ought to maybe not trade the previous 12-16 hours Friday. The final of places out of trades allover the globe contributes to a usually disorderly and huge marketplace.

You’re Done

Your trading strategy is full. That is actually everything is needed in a trading program. Sure you may create a 50 page plan but you might not need that? This plan of action must not be a lot more than just two pages long. It’s something which you are able to publish out, keep from the desk and read once or twice weekly.

In trading keeping things simple is your ideal path of action. Thus continue to keep your plan simple.