Trading plan in Forex Trading

This is a part of Forex trading for beginners tutorial. You can Download the whole tutorial as pdf here (right click and save as).

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You must have one. Simple as that. Of course, there is a whole learning process and you will be testing different Forex trading strategies. Eventually you should decide what works best for you and explore that part.

Your goal is to create trading plan. You should write down things like:

  • which currency pair you trade
  • which time frames you trade
  • when you enter a trade (based on what strategy / signals)
  • when you exit a trade (based on what strategy / signals)
  • stop losses – what is your risk per trade
  • taking profits and money management

If you do not have things like this written down, then you will be changing lot of things at once. That way you will never find out what you are doing wrong. I mentioned earlier that there are traders who can watch price action and wait for 1 or 2 traders which fit entry conditions from their trading plan. Thanks to the fact that they have a strategy, they know what they are waiting for.

When you do not have that kind of information (from your trading plan) then you act based on a hunch or emotions. That is not a way how you want to trade.

As I said, when you start to learn how to trade Forex, it is normal that you will be testing different systems and strategies. In the end, you should choose one and take your time to master it. And trading plan can help in that a lot.

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Part 1. Introduction to Forex trading Part 2. Trading tools Part 3. Money and position management in Forex