Make A Proper Forex Trading Plan and Trade the Plan Strictly

According to survey, traders who fail to make forex trading plan are more likely to fail in trading. Thus, making a proper forex trading plan and trading with it is one of the most important things to do for those who want to be a consistently profitable forex trader. The following are the reasons why traders need a forex trading plan and how to make a proper forex trading plan.

What can forex trading plan do for traders?

1. Forex trading plan help traders have a better understanding of the forex market Making a forex trading plan is similar to making a travel plan; travelers need to plan many things before they go on a journey. For example, they need to know how and when to get to their destination, which hotel to stay and where to visit etc. All these need travelers to make research first and then make the travelling plan. When making a forex trading plan, traders also need to make research on the present market and perceive the potential price movements in the near future. During the process of research, traders will have a better understanding of the forex market, which is beneficial for the following trades.

2. Forex trading plan can help refrain from greed Greed is one of the most important reasons that lead to the failure of traders. It is a kind of emotion that can control traders and push them to overtrade and take improper positions. Most of time, traders fail to realize that they are trading with such emotions. Everybody wants to become a millionaire within the shortest possible time but the problem is that this strong desire can not only prevent traders from getting rich, but also take away the chances of making steady small income. For example, if the price moves to a degree that trader can make a decent profit, but they refuse to exit trades for they want to make more. The result is he not only misses the chances of taking the profit, but also loses a big amount of money.

3. Forex trading plan can help traders gain experience Making a forex trading plan is beneficial for traders who want to learn trading experience. After completing a trade, traders can compare the forex trading plan with the trading results. By comparison, traders will know whether their forex trading strategies are good enough, whether their trading target is high or low and whether they trade properly etc. Traders are able to accumulate trading experience by making their own forex trading plan.

What makes a good forex trading plan?

A good forex trading plan includes many things that can contribute to successful forex trading. The following are the critical elements of a good forex trading plan.

1. Proper trading goal A realistic trading goal is important in a proper forex trading plan. Trading without proper goal is like traveling without destination. Traders need to know how much they want to make in every trade. With such goal, they will do their best to trade properly in order to reach the goal.

2. Define the proper entry point Traders can also list their entry strategies in the forex trading plan after they make research on the market. With the entry strategies, they are more likely to find the best entry point and make more profit.

3. Determine how much to invest in every trade If the trading goal is the expected reward that traders want to get, the amount that they want to invest in a trade might be the biggest risk that they are willing to bear. Some forex traders are quite impulsive; they might invest more than they can afford to lose due to impulsion. Thus, listing the amount they want to invest in every trade is important and helpful for such traders.

4. Plan exit before entry. Exit strategy is also an indispensable element for a successful forex trading plan. Traders can set trailing stop order to help them exit trades without involvements of emotions.

About the Author

If you are interested in this blog, please visit and view more on the website: http://www.ikonfx.com/forexblog/

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Currency Trading Information:

Related Articles

Psychology Of Trading
The psychological aspect of trading is usually underestimated by those new to trading. The psychological problem for most traders is the fear of losing - ironically it is this fear that causes most traders to lose money in the long run.
Experience
Throughout our course on futures trading, we have tried to point out to you that there is a great difference between having an investor attitude and being a trader. There are also many similarities.
A Short Introduction To FOREX
FOREX is the world's largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in.
Forex Trading Systems
The foreign exchange currency market is the largest market in the world because it trades up to $1.9 trillion daily.
Where to Get Forex Training
For those of you who are interested in forex trading, you may want to start off by getting some good forex training. Forex training is a necessity for anyone with this interest.
Forex Trading - Advantages and Disadvantages
What is Forex Trading?Forex, or Foreign Exchange, is the simultaneous exchange of one country's currency for that of another. This market of exchange has more daily volume, both buyers and sellers, than any other in the world.
Forex Trading Can Be Like Day-trading
Forex trading, or foreign currency trading, has become a bit of a craze of late, especially since it is something available to anyone who owns a computer. And anyone who is willing to put in some training time can profit from forex trading.
Writing A Trading Plan
All professional traders have a trading plan. Trading futures is a zero sum game and those with a plan (and the discipline to apply it) will succeed over those that have no plan.
Forex Training: Follow Your Gut or Your Broker
Which way will the forex market move? Do you just follow your gut feeling? Or do you have Neo's sixth sense that would let you be one with the market and feel the underlying currents.Trading forex is a non stop action movie but a good one, where you really don't know who will win at the end.
Example of a Profitable Transaction in FOREX
To make a profit, in the FOREX, a trader can enter the market as a *buy position* (known as going "long") or a *sell position*(known as going "short").For discussion, let's assume you've been studying the EURO.
Forex Trading Online - 7 Reasons Why You Should!
Forex trading online is a fast way to use your investmentcapital to it's fullest. The Forex markets offer distinctadvantages to the small and large traders alike, makingForex currency trading in many ways preferable to othermarkets such as stocks, options or traditional futures.
The Margin Advantages of Trading FOREX.
There is one aspect that is considered as one of the best advantages of FOREX Trading. This is related to the amount of money you need to place a trade, this is known as "margin", and in short, this is all that can be lost in a the case you had a bad trade.
Learn Forex Trading - a Guide for Beginners
One can learn forex trading as easily as one would like to learn other subjects or train in other professions. The criteria for learning forex trading is an analytical / logical bent of mind and some number crunching abilities.
Crisis of Confidence in the EU
The European Union (EU) constitution was dealt a double blow, first by a French "no" vote on 29-May and then by a follow on "no" from the Netherlands on 01-Jun. To add insult to injury, one low level Italian diplomat quickly called for a referendum in Italy to decide if a return to the lira was warranted.
The Meaning of FOREX Price Charts and How to Use Them
There is one very important factor that you should consider with great care if you are willing to become a successful, profitable Forex trader. This ever important factor that must be always present in the trader's portfolio, is the ability to read the charts.
Forex Broker
A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale.
Forex Signal, Forex Signals Advice
There are lot's of Forex signals providers out there. New Forex traders might be thinking of looking for a reliable Forex signals provider.
Business and the Forex
The business world is a complex web of supply and demand. Money and goods, physical or otherwise, pass through the global market every single day.
Why Hedge Foreign Currency Risk?
International commerce has rapidly increased as the internet has provided a new and more transparent marketplace for individuals and entities alike to conduct international business and trading activities. Significant changes in the international economic and political landscape have led to uncertainty regarding the direction of foreign exchange rates.
FOREX - Where Fortunes Are Made Everyday
The Foreign Exchange Market - better known as FOREX - is a world wide market for buying and selling currencies. It handles a huge volume of transactions 24 hours a day, 5 days a week.