It is better for everybody to make a plan before they take action. Forex trading is not an exception. Traders should first make a forex trading plan before they trade forex for real. We all know that forex market goes up and down, which may confuse forex traders now and then. A good trading plan is able to guide forex traders out of confusion. So what is a good forex trading plan and what should be included in a forex trading plan? I will list some vital things in a forex trading plan, but things are different from person to person greatly in a trading plan. The difference depends on many factors, for example: what forex traders want from trading forex and how much money they want to invest in trading?
A trading goal is necessary to a forex trading plan
A trading goal means what forex traders want to get from trading. for example:” I want to make enough money to buy a house” or “I want to get 5000$ to buy a present for my mom”., which are trading goals in a forex trading plan. No goal, no motivation. So remember to list what forex traders want from trading and always check how much they have achieved.
An outline of trading scheme is important to a forex trading plan
When making a forex trading plan, it is important for forex traders to make an outline of trading scheme. A trading scheme includes things such as the currency pairs to be traded, trading time; a trading scheme also contains the types of price trend analysis such as candlestick or line analysis etc.
Some trading strategies should be included in a forex trading plan
A forex trading plan cannot be a plan without some forex trading strategies. What strategies forex traders use is vital to profit-making. So it is wise to include some useful but simple trading strategies in a forex trading plan. When forex traders feel confused in trading, they can refer to the trading strategies and make correction.
A money management plan is also crucial
A money management plan is vital to a forex trading plan. A good money management plan helps forex traders to make more profit or decrease potential losses greatly. A money management plan includes how much money forex traders should invest in trading and how much they should keep in their account. For example, a forex trader decides to invest 5% of his account money into forex market and remain the rest 95% for reserve fund.
List shortcomings of forex traders is necessary
The shortcoming I mean is not like “I am short” or “I am dumb” etc. In a forex trading plan, the shortcomings I refered to are those tend to stop forex traders from getting profit. Shortcomings in a forex trading plan should include:” I am indecisive” or “I am impulsive” etc. Then why do forex traders list shortcomings in a forex trading plan? The answer is: by writing down shortcomings in a forex trading plan, forex traders can have a better understanding of their own characteristics or features. Thus they are able to alert themselves not to be affected by shortcomings in forex trading.
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