Every trader in whose name the trading should have a trading plan. There is a phrase that says “if you do not have a plan then you plan to fail”. This might sound corny but when you are trading forex you will definitely believe.
A successful trader has a trading plan that begins with the general picture and then implements them in a rule referenced in the transaction. In addition, it is also no less important is make a record or journal of trading you do. By having a journal or record it will help you later on in evaluating your trading plan. Here are some guidelines that you can follow in the learning process to develop a forex trading plan:
1. Expectations / Hope
Why did you decide to jump in forex trading and what do you expect from this trade? With this build from beginning it will help to make your trading on track, and ward off disappointment.
2. Plan Risks
Previous decide how much capital you want to use for trading, of course, these funds will not disturb your household finances or crude language parking fund. Probably sounds corny, but psychologically it will greatly affect your mental, other than that specified how big your target. Do not even once risking more than you can bear, you should not feel the trauma or despair when you experience loss, to try to identify the risk you are prepared to the liability of any transaction that you make at the beginning. In the sense that once you get a position at that time you already know how much risk you are prepared to bear.
3. Goal / Target
Set a reasonable goal of any profit you want to earn in a certain period, it should be based on the strategy that you use and the target is also calculated based on the daily periods to those that include day traders, weekly period to those that include swing trader and period monthly for those who like scalping.
Make detailed rules of strategy you use, the time frame you use, the indicators that you use as a trigger or triggers and indicators to be used to confirm the required before you enter a position if signals a Buy or Sell, you must also specify in detail under what conditions you exit or close a position, when to take profit or stop loss set.
This is the last step of the important but often overlooked or not done by many traders, to evaluate your trades in advance will make your trading will be more developed. By evaluating trading transactions are carried out before then you’ll know whether in accordance with the trading plan as well as your target and also to review the loss of your trading and find out what causes it.
If you apply trading recklessly, then the results will reflect your trading. Trading plan used to base your trading success in the future