A home run means creating a Forex trading plan that will help you win. If you are serious about your trading and want to earn profits than you must be willing to do what is necessary to get the desired result. The first thing that you must do is create a trading plan. Forex trading is a business and you must treat it as a business. Ask a management professional what is the first thing any good business must have, a business plan. This step is non negotiable, a plan must be created and executed to ensure success. The truth is that most traders do not have a trading plan, and the ones that do are not executing that plan.
The purpose of this article is to educate traders on how to create a winning trading plan. First you have to determine what is going to be in your plan, here is the basics:
* Rules that must be followed
* It must not be in your head it has to be in writing(if it is in your head it is a fantasy not a plan)
* Purpose of the plan
* Find a winning system and Strategy (this part sounds hard but it’s not) the hard part is following the winning system
* Write your mindset (For Example: I will be a winner and I will follow my plan)
* Write your goals (trade for a living)
* Trading Journal( I use a spread sheet)
* Proper risk and money management
Those are the basics of how to create a winning trading plan. The most difficult part is following the plan and following all the rules for the plan. Please comment on what you use for your personal trading plan so I can learn more about trading plans from other traders.
Here is sample trading plan you can use to help you with creating your own plan:
Rule Number one, Never Violate the Trading Plan.
Mindset: I will be a disciplined trader.
Goal is 7% profit per month. When profit reaches 10% Leverage trades to increase trade size without taking on additional risk. Each trade past 10% I will then lock in great winning %.
Use Weekly and Daily Bar for entry with the direction of the trend or sideways Market.
Also take note of Support or Resistance. Use Fibonacci support and resistance as well.
Use Entry orders for entries
Using 4 hr or 8 hour chart for entries.
Trade always with the trend unless there is no clear trend or if there is a counter trend signal.
Counter Trend Entry:
Daily Pin Bar with a strong support level.
Also add Fibonacci Levels for entry points.
Risk up to 2% per trade with a target of 8% per trade which is about 100 pips on average.
If we reach 5% draw down per week we then stop trading for the week and analyze all trades.
Hard Take Profit set at min of 8% TP.
When it gets close to the TP, I will consider allowing the trade to run or hit the TP at that time. If I allow the trade to run I will manually trail the stop with a 3 bar trailing Stop.
I will Use MT4
Use an EA to ensure no risk errors.
If I do open trade with wrong size or risk I will IMMEDIATELY CLOSE THE TRADE!
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