As a Forex trader the best thing that can do is have a trading plan. A trading plan plays a pivotal role in making you a successful trader and the malpractice of not using or worse not even making a trading plan will get you nowhere in the Forex trade. Making a trading plan and using that trading plan on a regular basis can take you places. Always consider the following points while making a Forex trading plan
Make a plan and keep tab of trades
To get in the groove and become a seasoned Forex trader you need to stay on the right track and have a disciplined approach. In order to reach that point you will need to do the following 1) Develop a Forex trading plan 2) Use a Forex journal 3) Use BOTH the plan and the journal.
Always develop the trading plan keeping an effective trading strategy at the centre of the process. This approach not only strengthens your understanding of the market but also provides you with a great plant to aid your interaction with the market. This market interaction plan is important to help in developing the disciplined approach that is needed to be a successful trader in the Forex market.
Keeping a log of all the trades you make helps you in visualizing your position as a trader and work on your negatives. The track record also helps in analysing and understanding your trading edge and adjust it in accordance with your trading strategy. This improves your strategy over time and makes it better with every tweak you make.
Create a routine and a checklist
To be a successful trader you need to have a routine, if you don’t have one then please make one else trading for you will become difficult than ever as you progress with your trading career. All you need to do is stick to a trading routine and follow it over a period of time tweaking it and improving it. For this to happen, you need to be as disciplined as a soldier, fighting the Forex war. Focus on the easy trades, trades that are obvious and make it a habit if you really want to make it big.
The second most important thing is making a checklist, the checklist should always contain the things that you want a trade to have in order or you to trade it and the basic things that you look in the market. If the trade fulfils the checklist then only enter the trade else it is better to stay out of it. So if the checklist is deciding the trades for you then you might as well put some thought into it. Be precise and comprehensive while you make the checklist. This will help you trade better in every possible way.
Have a set of written guidelines and images in your trading plan
As a trader your trading plan should be inclusive of written descriptions of everything that you want to do as a trader, your strategy for risk management, your trading edge, trading your edge, when to trade your trading edge, time frames for the trade and your goals.
Include images of the ideal setup that gives you a trading edge. This will act as a reminder of what an ideal setup looks like and would make sure that you trade only when you find optimal conditions. When you practice the trading plan for a considerable period of time the rules would get etched on your brain and you won’t need to refer to the checklist all the time to test the conditions that decide the feasibility of the trade.
Anticipated trades work the best
It is always better to plan a trade and this is one of the major reasons why you should have a trade plan. Determining what you are looking for in the market at an earlier stage helps in making better trades. You need to work on these plans when you are not in the market because you can then take better decisions in a calm and objective manner. In this way while you trade none of the pressures of the market would be able to affect you and thus all your emotional decisions would lay to rest because you already have a plan.
Patience is a virtue- Wait for the right trade
There is nothing better than a patient trader; with the right set of tools and the right amount of patience a trader can reach his goals in no time. When you are patient enough you would be able to wait for your trading edge and thus make it big. Patience helps you in eliminating a large number of loosing trades and thus helps you in making calculated decisions.
If you wait for your marketing edge and trade it well then you are bound to strike gold. Make sure that you keep telling yourself to be patient and in turn note it down as an integral part of your trading plan.