So, you want to make a trading plan. Why? After all if you don't have a good reason, why bother? Let me guess at your reason. You know that a plan will help you make money. Is that it? (I'm close, right?)
That's sort of right. The real thing that this will help you with is honesty with yourself. If you are totally honest with yourself as you create your trading plan, you will see areas that need work. While it may bother you to have to acknowledge the facts, you will benefit much more if you face it head on.
What should you put into your trading plan? The usual suspects . . .
* Your entry logic (in other words, how and why you enter the market)
* What exit logic (the how and why of your exiting the market both with profit and with a loss)
* You money management rules
* Which markets (or more specifically what currency pairs)
* When (time of day/time of the week) you will do your trading
All the above items are important to your trading success. However, you're not writing them down because they are important. You're writing them down so you can tell just how clearly you understand them. If you struggle to write any of them, that is a huge red flag to you saying that you don't understand enough to be trading with real money (unless you like throwing it away)
Don't fake it. No body is ever going to look at your plan. Be honest and really help yourself. If you cheat, you're the one who's going to pay for it.
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
Download it free here: Forex Trading
Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
Source: www.isnare.com
