Everyone knows that the key to any successful operation, business or a new project is precisely the existence of a trading plan. The international currency market Forex is no exception.
Trading plan is certain items, the implementation of which not only forms the trader and the trading system is the key to a lucrative job in the foreign exchange market. Forex trading plan is nothing more than a guide for exchange participants - instruction that keeps traders from mistakes and rash decisions and teaches them self-discipline.
And such a plan - to form a pre-designated system is essential for a trader, especially for a beginner. Moreover, that very often, most beginners mistaken, mistakenly believing that Forex trading plan should apply only to the process of conducting trades - analysis of trends and implementation of trading Forex.
But it is not so. It is well designed and high quality Forex plan includes aspects such as setting goals, methods of their solutions, practice and implementation of this plan. Planning and designating the main task - the purpose of the work, we pre-determine the original result - whether it will be successful.
If a trader wants to become a professional and earn good money, he has to get serious about planning issues. A plan, a trader takes into account items such as the choice of the currency pair (or another tool for trading), it sets the price limit and conditions for transactions, puts his goals in terms of income.
For example, if you have available funds in the amount of several thousand dollars, you do not make much effort to earn a little extra income by opening a single transaction in a week or a few days. But the situation radically changes the situation, if you regard the currency Forex market as a source of basic income. Profit requirements are different - the presence of a small amount of available funds for trading refers to the use of leverage and relatively risky strategies to trade.
This plan must take into account Forex - to determine the ratio of the desires of the trader and its possibilities. Better to put yourself realistic goals that can be realized. After the step of setting a goal, it is important to be defined with a choice of trading strategies in the Forex. Trading strategy is largely dependent on trading style, size of the deposit and the trader ambitions. But let us also to the basic criteria for the drawing up of an effective Forex plan.
Thus, the plan should include:
1. Analysis of the situation on the market (at the moment).
2. Search for favorable entry points to the market - based on the analysis and sizes of stop orders.
3. An estimate of the lot, and the amount of free resources available to the trader is willing to risk. The accuracy of the forecast is largely dependent on the ratio of risk to reward.
Step 4. Number 4 - receiving signals at the entrance to the market and the opening of the transaction.
5. move the stop-loss and take-profit - control over open orders, modification of pending orders only in the case of changes in the market situation and with the aim of a trader to take profits.
Using the above-mentioned points of the plan, the trader does not complicate yourself trade, but on the contrary, facilitates the trading, accounting for a set of actions and following them, he avoids the common mistakes and financial losses.
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Author Andrew Kemp WELTRADE
Article → Forex from A to Z
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