Develop your Trading Plan

Develop your Trading Plan

Sometimes there is a misconceptionthat you need highly evolved market knowledge and years of trading experienceto be successful. However, we often see that the more information we have themore difficult it is to create a clear plan. More information tends to createhesitation and doubt, which in turn allows emotions to creep in. This canprevent you from taking a step back and looking at a situation subjectively.

If you don’t know where you aregoing, any road will get you there. In trading, if you don’t set out a plan foryour trades and develop strategies to follow you have no way to measure yoursuccess. The vast majority of people do not trade to a plan, so it’s not amystery why they lose money. Trading with a plan is comparable to building abusiness. We are never going to be able to beat the market. In general it’s notabout winning or losing, it’s about being profitable overall.

Why a trading plan is important

When trading, as in mostendeavors, it’s important to start at the end and work backwards to create yourplan and figure out what type of trader you should be. The most successfultraders trade to a plan, and may even have several plans that work together.Always write things down. Why? Because it will help you stay focused on yourtrading objectives, and the less judgment we have to use the better. A planhelps you maintain discipline as a trader. It should help you tradeconsistently, manage your emotions, and even help to improve your tradingstrategy. It is also important to use your plan. Many people make the mistakeof spending all their time creating a plan, then never implementing it.

Key components to develop atrading plan

Trading plan structure andmonetary goals

Research and education

Strategy using fundamental andtechnical tools

Money and risk management

Timing

Trade mechanics, documentation,and testing

How to build a trading plan

Make sure you do your own researchand build a plan according to your needs. Find confidence in what you know. Thetools you have selected for your strategy are key, from the type of chart tothe specific drawing tools to even the most elaborate of strategies. Test yourplan in the beginning to make sure you are on the right track. After you havebegun trading, continue testing it regularly. This allows you to measure yoursuccess by clearly seeing what works and what does not work. From there you cantweak elements that might be weaker and not contributing to your overall goal.Ask yourself the following questions (The answers to these will assist you inthe foundation for your trading plan and should be referred back to regularlyto insure that you are on track with your plan.)

Why am I trading?

If your immediate answer is, "to make money" you should stop right there. If the only goal is to make as much money as fast as we can, we are ultimately doomed, because it will never be enough. Your primary goal. This will create an environment in which profits can be generated.

What is your motivation?

Solid retirement? New career? Spend more time with family and friends?

Ask yourself, “What are my strengths and weaknesses?”

How do I maximize my strengths to minimize my weaknesses?

An example of a weakness is a need to constantly watch one's trades. Is your laptop on the pillow, waking you up in the middle of the night to monitor trades? It's really difficult to make intelligent decisions when you're half awake.

Is the amount of money I have to trade with sensible to achieve my goals?

Look at things in percentages; remember leverage is a double-edged sword. That is why risk and money management are key.

Deciding what type of trader you are can be tough; especially since the trader you want to be can be different from the type of trader you should be based on your behaviors and characteristics. Once you have laid out your goals, risk appetite, strengths , and weaknesses it should become apparent which type of trading fits you best. You will notice three columns in the chart; they are labeled short, base and long. Base equals the timeframe charts you spend the majority of your time, if you are not The common mistake traders make is jumping around the between

Open trading account with one of the  best forex brokers  and GET  FREE forex Signals  via SMS, Email and WhatsApp  

SIGN UP FOR A FREE TRIAL To Access FREE  Forex Signals  in the Members Area START FREE 30 DAYS TRIAL on  https://www.freeforex-signals.com/

联系我时，请说明来自澳洲同城网！