Here is my guide on how to build a forex trading plan, this is a trading plan template that you can use to base your trading plan on, remember this is not a real plan, although it is loosely based on mine.
My long term goal is to learn to make my living from the forex market. My short term goals for the next six months are to be more disciplined and wait for the very best setups to come along before trading.
My edge is price action forex setups which are high probability setups when traded with added confluences. My trading strategy will involve using discretion along with technical analysis (TA) involving the above setups.
My edge is also that I keep a trading diary and record all my trades, I also have a daily routine that gives my trading structure and adds discipline. This puts me ahead of those who don’t.
To help make trading decisions and to map out the market I will use support and resistance, trend lines and moving averages. I can use Fibonacci although I will not rely on this heavily.
I will generally be a with the trend trader, and I will be looking at buying and selling currencies at value locations in the markets and holding until the target gets hit or I’m stopped. I will use daily charts, 4hr charts and 1 hr charts. I will have to use my discretion when selecting trades. I will avoid trying to pick bottoms or tops in the forex market on a regular bases.
I’m sometimes impatient and don’t wait for the best setups, these mean I sometimes take poorer quality trades.
My strengths are I work hard and I am patient, I do not expect to become a brilliant trader overnight.
- I will only trade if it looks like I can get 2 times what I risked for a profit.
- I will risk 2% of my account max, on a trade.
- I will stop trading for a month if a I lose more than 10%
- I will add $100 to my account every month.I will not trade with money I cant afford to lose
Rules For Stop losses
- I will move to breakeven after I’m up 1.5 times what I risked risked.
- I will never move my stop loss away from the trade.
- I will trail my stops losses after I’m up over 3 times risk.
- I will keep trading records
- I will not trade if I am stressed out.
- I will try and avoid fear or euphoria
- I will not be influenced by other peoples opinions.
- I will not use any other tools other than those mentioned above to make trades.
- I will monitor the trading plan closely and change parts to make it better.
- I will no sit in front of my screen watching my trades all day long.
- I will read my trading plan every day.
This is a template of a forex trading plan. You should not use this as your trading plan and you should base your trading plan on your own forex trading methods.
I hope this has helped you to write a trading plan.