Updated: Mar 13, 2019
The Forex market is a new age business war where you may win lots of money. And in order to win the war, you gotta have a plan!
The first time I traded relying with googled knowledge and own experiments, I did not have a plan. Heck, I didn’t even have a clue what that is! I thought for as long as you know the basic principle of “buy low, sell high” and of course, how to click through placing an order, you are good to go.
One week into trading, I grew my mini $100 to $200+. Obviously, over 100% gain! Told myself the world was good and I was rockin’ it. Then came Week 2, I was in the money. But, Donald Trump won US Elections. BAAAAAM! Margin Called. The world was suddenly cruel and I was broke.
After getting past that brokenness, I learned more. Devised trading plans. Am now incomparably richer and wiser. Trading plan gets you from point A to B of your forex experience and this is why you must have one too.
Here are tips on preparing your trading plan:
1. Make TIME
The market is open 24/6, from 9AM Sydney to 5PM New York. In Manila, that’s Monday 6am to Saturday 6am. Sometimes, the times adjust depending on a country’s holiday or season. Anyway, the best time to create your trading plan is during the weekends—that is, when the market is closed. Since the prices are not moving, you can analyze more objectively and less likely to be swayed by sudden big movements and changes.
I spend at least two hours running through ALL the popular currency pairs plus some commodities, indices, and exotics. You don’t have to. Just pick favorites. I personally like Gold. Because once you know Gold, you know USD. And when you know USD. You have idea with the world economy. Well, just about any pairings with US. Still, that’s a lot. Can’t think of an economy solely detached from US.
Tip: make forex friends and divide the task of analyzing currency pair groups (e.g. you’re assigned to FX majors, friend A is on GBP pairs, friend B is on JPY pairs, etc.) When you join our community and access Exclusives, I will do my best to not get lazy sharing weekly analysis 😊
2. Write and Organize
Get a notebook exclusively dedicated for your forex experiences. Or better yet, make an Excel file that would list and track your trade ideas, results, and even your emotions involved when you’re trading. This is important! This way, you will be able to pinpoint things to improve on, where you suck at, and why you probably rushed a trade.
Remember, forex like any skill is a work in progress. The “overnight” successes you see on social media is actually from a consistent and persistent preparation. Below is sample of organizing a trading plan in an Excel.
Make a template that makes sense to you.
3. Stick to your Plan!
Because what’s the point in planning your trades when it turns out you don’t follow them? Set your rules. Respect your boundaries. The reason why I was margin called in the story above was because I didn’t have boundaries a.k.a. Stop-loss.
Things to consider for your rules/ boundaries:
-Where is your ENTRY?
-When will you EXIT?
-How much are you WILLING TO RISK?
At the very least, identify these things. Monitor the price movements. See if they are on the ripe for trading levels then, TRADE. Otherwise, WAIT! Have the discipline to know what to do in a particular market situation.
By the way, you don’t have to stay up late or ditch your sleep altogether. Better yet, include it in your rules too. You gotta have quality rest to think clearly! With technological advancements nowadays, there are apps and other sites to assist you (which I knooow, I said I will hook you up with).
Most importantly, accept your emotions. Forex can be crazy. You have the right to feel because money (that’s probably your retirement fund) is at stake! However, do not wallow. No matter how ecstatic or disappointed you are, you can only live on the present moment. You won? Great, you’re richer! You lost? Well, you’re wiser.
Guilty, I wish I knew this when I was starting. Now, I’m hoping you are well and find this to be helpful. As some saying goes “If you fail to plan then, you’re planning to fail”.
Happy Trading Everyone!
@marilesaca || Trading Kitten :3
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