For a trader's trading plan is needed to obtain a consistent trading results. But many traders believe that trading plan can be made quickly and instantly, and even tend to ignore it.
One of the factors of success in forex trading is discipline, and only with a trading plan that is made properly and objectively a trader can practice the discipline according to the rules set out in planningnya. By creating a trading plan, a trader has been responsible for himself if his trading results are not as expected, and can immediately take the best steps on his trading account without hesitation and panic if the market price movement direction opposite to prediction.
The more you push yourself to enter the market with so many variables analyzes technical and fundamental data that exist in the market, the results of your trading account is not consistent. It's a psychological hurdle that must be overcome by a trader. This fact is directly related to the concept that patience in forex trading will get a reward or reward from the market. Be patient waiting for price action signals formed on the market will not only increase the chances of success of our trade, but also self-confidence, because if we are trading accuracy with which the method can be reliable enough as price action method, then it will naturally strengthen our confidence. Another psychological hurdle that must be overcome is that of excessive self-confidence and a feeling of euphoria, after obtaining the results are quite consistent in our trading. This is the difference between a professional trader and a trader who has not enough flying hours. Professional traders always able to keep his feelings and be fully aware that emotions should not be involved in matters of trade.
The best way that we do not involve emotions in trading activity is to make a definite trading plan with a clear trading scenarios about what will be taken for any changes in market conditions. Many traders are not trying to make a trading plan because they do not know how to start, and what should be the contents of a trading plan it. Actually a good trading plan for us is that we can conveniently apply, in accordance with the maximum knowledge we have about the market. Not to be complicated and long-winded. The most important thing is that we require ourselves to earnestly we will apply it in every entry.
The important thing to be considered in making a trading plan:
1 Determine the strategy for entry. Take the best way or technique of your experience applying various methods of entry on a variety of market conditions. For example, you choose a reversal pin bar in trending market conditions (for price action strategies) with supporting indicators moving average, then convince yourself that this condition is the most excellent and accurate for entry in trending market conditions compared to other ways.
2 Determine the risk / reward ratio. This risk management scenario should you apply to any position that you would take. Make sure you have really understood about position sizing is the most important part in determining the risk.
3 Determine the appropriate position size with stop loss targets. Position size can vary according to the risk of stop loss per trade that we specify. The risk per trade should be determined first before determining the stop loss level.
4 Define an exit strategy or take profit. Exit targets should be determined well before entry, in accordance with rewrd we agreed. Should not determine the level exit when the trade is in progress, because our emotions tend to get involved when we trade without exit the target. We will be more objective when yet have a position.
5 Create a journal and notes for evaluation. For each position should have diclose, either profit or loss for a given record quality evaluation strategies and plans we have made, perhaps to be fixed in the future.
Actually there is no definite method to create a trading plan, but for traders who have never tried to use a trading plan, can apply the above concept to begin with.
