One crucial element for you to become a successful trader is the trading plan. Many traders have never even made a plan; others have done it but then do not use it. I hereby state that it is absolutely essential that you make and use a trading plan to be successful in the Forex trading.
Here are the important things to consider in relation to a Forex trading plan:
Follow a plan, keep a journal and record your trades
What is intended is that you become and keep a disciplined and organized trader. For this you need these three things:
- Create a Forex trading plan;
- Create a trading journal to record your trades;
- USE both things.
Let’s say that your effective strategy of approaching the market is through the movement or the action of the price. In this context, the process of creating a trading plan will help you to solidify and better understand your strategy and at the same time will allow you to look at a simple diagram that was created by you and that will help you to know what to do every time you work in the market.
Having a document that will serve as a guide or as a map will develop a military discipline, fundamental for achieving success in the Forex market. Adjust some things that are not working so well in your strategy.
Trading plans must contain a routine and a check list
We want to say that Trader needs to have a working routine in its trading activities. If not, you will not know what you’re doing … and the road to disaster is fast!
As a trader you have to define your way of being in the markets and always act in the same way, always with the same philosophy. Your trading plan should include a check list to follow. This checklist contemplates actions that you are looking for the market to do (for example, the price of a certain support) and actions that you must have before entering a trade. So if your check list is full you enter the trade, otherwise you have to wait until a new opportunity comes up, that is until your check list is filled.
Formulating your trading plan through a check list and a reliable CMTrading broker is undoubtedly a great format for you to evaluate and have very little doubt about whether a particular set up is valid for a trade.