A Better Trading Plan For Forex
Make Your Plan and Follow It
It is very important to follow a set forex trading plan and not skip or leave out essential steps in Forex trading. This way if you have problems you will be able to examine everything you have done and find what went wrong.
Trading is not a gamble; it needs to be treated like a serious business in order to make it productive for you. Keep a record of any trades you do and make a note of all the details.
This will help you better understand what is happening and give you a situation you can refer to in the future if you should encounter a similar situation.
You need to develop a righteous perspective when it comes to the market. Keeping a forex trading plan will help keep you focused and develop the right perspective that will allow you to succeed.
Find the Right Time Frame For Your Plan
Find the time frame that is right for you. A five-minute frame is recommended for beginners.
Try this out until you get the feel of what you are doing. If you try to go too fast in the beginning, it will be much like gambling in a casino. This is not the way to do Forex trading.
Once you get the feel of it, you may want to slow down or speed up. The best thing to do is what you feel comfortable with.
Use One Market
Every market is different, you need to focus on one and learn how it works. The YM is a good option for new traders as it trends well most of the time and the change from simulation to money goes well.
If the market goes against you, they have the $5.00 point contract, which makes for a better outcome.
Learn the signals one at a time, this way you will know what to do when you see an opportunity. This is a great way to stay focused, which is important in Forex trading.
Try the ZLR signal when starting out. It is the best CCI signal for a newbie to use as it is a retrace and creates a buy or sell option. There are five or more of these types of trades every day when using the five minute YM.
If you can trade one contract, you may be able to trade another one. On the other hand if you cannot trade one, why try to trade another one? Why risk it? You may lose some and win it back but if so it is only through luck, such as you might have in a casino.
If you want to succeed in Forex, you need to learn to have confidence and stay focused for your forex trading plan. Luck is not the way to make successful trades.
Determine Your Risk before Entering a Trade.
Think about how much you are willing to risk on a given trade. How much are you willing to risk before getting out and taking your loses? Keep this firmly in mind before you make a trade and stick with the forex trading plan.
You can at least cut your losses on a bad trade and keep your confidence. Always be prepared for what might happen, this will help keep your mind in a positive mode and let you go on to watch for the next signal.
Anything can happen when trading in the market; you need to be prepared for this by having rules to trade by.
Set a Stop As Soon As You Enter the Trade
Keep a close eye on the stats to see if you are gaining or losing on your trade. You should keep a hard copy of all the details of your trade, such as entry details, stops, exit, and anything else you feel is needed.
Try to focus on the forex trading plan itself instead of being tempted to make up trades. Having a plan will help you evolve from a new trader to an experienced one who has the experience and intuition to have a good idea what will happen in the market.
No one can predict an outcome but with a plan that you follow, you will be able to stay focused and build the confidence you need to succeed as a trader.
Determine Exit Before Entering a Trade.
The mental aspect of trading is the hardest barrier to get past. You can watch and learn the patterns of the market, jump in when it looks good and get out before it goes bad.
Always set an exit plan before trading, keep it in mind so you can get out when you need to. Set a time frame to get out and stick with it. Do not let other factors distract you especially when learning about the trading market.
Record on Paper All of the Characteristics of Each Trade
Write down everything concerned with the trades you are involved with, keep it handy so you can refer back to it as needed. This way you can refer to it and learn more about how the market works based on your earlier trading.
It will also help you see what went wrong with a trade that did not work out in the forex trading plan.
Maintain a List of Phone Numbers in Case of ISP or Power Outages.
You will need to write down all phone numbers concerned with your trading. You may need to use it if your internet goes down or you have a power outage. If this happens, you will have no way to continue trading without a phone number. This is very important; do not neglect to do it.