Forex Trading Plan

What is a Trading plan?

A Forex trading plan is basically a business plan except a trading plan is for traders that want to succeed in forex. If you are serious about being a trader you will have a plan. This is what you should have in your plan.

  • Overall Purpose of why you are trading and what you want to accomplish
  • Goals that you can measure your progress to see if you are winning or losing. What steps you must take to see your goals become successful
  • A system that you have developed to include the trading strategy, money management, Trading routine, and the time to be in the market
  • Set your mindset – Write down that you will be successful and you will follow the rules and you will not give up when times are difficult. I know that this will be difficult but I know what it takes to succeed and I will do what is right by my trading plan. The plan is king I will follow the plan. The plan rules I wrote it therefore, I will follow my plan, not my feelings or emotions. My feelings and emotions will lie to me but my plan that I wrote works and by following I will have evidence and proof that it works.
  • Weaknesses – Write them down and come up with a strategy to defeat your own weaknesses. Don’t be a fool we all have weaknesses and those that are successful will identify them and deal with them. Set up ways to overcome them, for example if you have difficulty following your money management rules find write that down and tell yourself today I will follow my money management rules. If I have to get my mother to sit with me and make sure I follow them I will. If I have to get approval from my broker to make sure that I am following my plan I will. So what I mean is don’ t let yourself cause failure. Make sure that your weaknesses don’t take you down. Do whatever it takes to beat those weaknesses.
  • Trading Journal – It is important to have a trading journal. It takes discipline to maintain a journal yes it is hard it takes about 5 minutes once you set it up. Make it part of your routine. Writing down what trades you make which pair, what price, notes as to why the signals you got the reason it looked good. As you do this you will begin to learn where you messed up. You will begin to notice that when you don’t follow rules you get creamed. The reason I do this is because it teaches me to follow the rules. I hope you are beginning to see a theme here. Trading is not a gambling event to get rich quick. Trading is creating a system and following it. The idea is simple, but it is oh so hard to pull it off. I use a spread sheet for my trade journal.

Example Trading Plan (My Personal Trading Plan to share with you)

Ok, First I want to say we are not all the same, so make your own plan that fits but you can use mine.

Overall purpose

The reason I am trading to make a living to provide for my family. So I can be free to do other activities in my life that I think is good. I want to accomplish the difficult task of being profitable in the forex market. And to do it for a living.
 


 
Goals

Goal 1: Follow My rules and this plan how I am going to that is print this plan out an put it in front of my computer and look at it everyday.

Goal 2: Make a 5 percent gain in my account each week.

System

My system is a simple strategy with a set of rules to follow. Rules for my System:

  • Capitol Preservation is most important. I must always protect my account once it is gone trading is over. It does not matter how large the account is if I risk too much it can be wiped out before you realize it.
  • Risk 1% of total account value on all trades
  • Identify the trend on 4 hr Chart and trade within the trend. If the trend is up I trade only long trades.
  • 1 to 3 Risk Reward Ratio. Let my winners run and cut my losers short.
  • Trade only in the hours of 8 am to 12 pm.
  • Use a 3 EMA and a 30 EMA 25 EMA on a 2 hr chart. When the 3 EMA crosses above or below the 30 that is when you enter. Wait until the 2 hour candle closes.
  • Open 3 lots with a stop just above the high on the two hour candle before the candle you enter on. Adjust stops as the trade moves in your favor.
  • Use MACD with 12,26,9 settings the purpose of the MACD is to exit trades. When the lines on the MACD Cross after you enter that is when you exit 2 lots two take profit. Keep the 3rd lot open to let the profits go on more.

 

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