Creating A Trading Plan (1)
A trading plan is a set of rules on all your trading activity. Survey proves that the end result they are trading based on a plan turned out much better than those without a plan. In the business adage says' if you fail to plan you plan to fail means' '(Fail to plan and you plan to fail). This is also true in the business of trading in the forex market. They are trading with a clear plan will be entering the market with the idea that has been planned based on personal psychology, trading styles, strategies and goals to be achieved. A good plan will make your trading more objectively and reduce the emotional involvement that will cause stress. In addition to the targeted plan you will be able to stay afloat in the market with a consistent trading results.
Because a plan will be able to reduce the involvement of emotions, then you can trade more efficiently. You will tend to feel more calm with rational decisions and purposeful as you have '' kode''kan the trading plan. Depend on the tastes and needs, you can also apply the script, create an Expert Advisor (EA) or even creating software robots instead of conventional trading plan that you may already obsolete value. However, you do not have to impose the use of trading software because not all that you think will be adapted or translated into a program. In fact, many professional forex traders who do not fully use the trading software. Their main trading plan is written conventionally.
Many disrupt trading plan trading strategy. Perhaps there who think it's just the term alone, but to the topic being discussed, must be distinguished clearly between trading plan and trading strategy that is not ambiguous and overlapping. Trading strategy only relates to the level of entry, exit and trade management level, are trading plan covers your whole way of thinking including trading strategies, short-term goals and long-term, money management, routine and emergency actions you should take if circumstances endanger your account.
These points will make you always focus on the plan if you are trading seriously. Besides, you will always proofread your plan with new ideas, new skills and knowledge so that you create a trading plan that can adapt to changing market conditions which is always the case.
5 key elements of a trading plan
Simply put a trading plan should have 5 main elements, namely:
1 How to think in trading (trading mindset)
2 Goals, can long-term, short-term or both
3 Money management (including risk management)
4. trading strategy
5. Routines trading
Before discussing the above items one by one, you should know exactly what motivates you to trade forex. Just for fun, just to earn extra income, or forced because there is no other work while earnings should be there, or because it really interested (was just a fad), and perhaps also because you want to gain a huge advantage in time short, given the income that you earn today '' that much-much alone ''. Whatever the reason you will greatly affect the way you think after really dive into trading.
