The Trading plan is the main basic data sheet of trader before entry in trade set up. All of the professional traders are using the trading plan sheet. We know very well a small scale business or huge company is having their own Planning. They are going through their business plan. A trading plan is an organized approach to executing a trading system that you’ve developed based on your market analysis while factoring in risk control and forex trading psychology.
The trading plan is that we have to make a proper plan to achieve the success without any mistake. The trading plan is working to reduce the more trading mistake and gives the best way to trade. A trader can trade with discipline and trade in long term with a system.
You know many beginners’ traders are losing money because of trading without trading plan and they fall in over trading with emotion. Finalize they blow out their trading account with few days.
The great mistake of traders are not using trading plan.
The trading plan is a sheet, you can make in MS excel or in your note book. The trading plan check sheet should be contains the stop loss, Trade entry & exit, Trading strategy, Money management, Check time interval and more, I am explaining below.
Check time: Time is most important and you need to check the market at time interval morning, afternoon or evening with date or time period you can comfortable with interval daily, 4hours or 1 hours frequently you watch the market.
Currency pair/Stock: Decide to trade which currency pair or any other stock. Then you can identify and noted in trading plan sheet.
Trade,short/long term: You should decide ,you want to trade short term or long term with either sell or buy.
Trading strategy: What strategy is here in market, you are looking and meet your pre-defined trading strategy. which strategy is meet to price action strategy or multiple candlestick pattern strategy.
Money Management, RR: To maintain Risk to reward trading method in forex is good to exist long term in forex trading. You need manage to protect your capital in trading and how much you afford to risk freely and get higher reward required.
Trending Market, consolidation, EMA: we need to find out, movement of market is either up-trending or downtrend. It is range bound market. Or cross over EMA.
Stop Loss: Stop loss must be used in every trade.the main reason to set stop loss to protect capital.
Trade Entry: Market Entry point is most important point for profitable and successful trader.
Trade Exit: Trade exit or take profit is also highly required point for successful trader.
Once you have the rules written in your trading plan sheet, it is much easier to apply them, as there is a clear plan of action on how they need to be followed.
Conclusion: The main aim of trading plan is reduce the trading mistakes and control the forex trading psychology. This is a system to achieve your goal. This article will provide you with a better understanding of the importance and uses of a Forex trading plan, so that you can use the information to become a better and more successful trader.Trading Plan and trading journal are most important before trade set up.To check the full forex course and access price action trading course in Gold member area.
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