FX currency trading requires certain things if you are going to do it successfully. One of these things is that you need to take it seriously. It is no good going into FX or forex trading if you just treat it like a game. You will never make any money, in fact you will lose the game. The way to win is to treat it more like a business.

This means that you need a plan. Not a business plan, although it might have a few things in common with that, but a trading plan. The trading plan comes in several versions but for all of the approaches, it is vital, as we said before, that you treat it seriously. It is a blueprint for your success and if you dip in and out of it, applying it only when it suits you and relying on intuition the rest of the time, you cannot hope to make money or even learn anything useful from the experience.

Long Term FX Currency Trading Plan

When you think about your long term goals for your currency trading, it is actually better not to think in terms of money. You may be hoping to double your money in six months or whatever, but in fact it is not so important how much money you make. All that matters on the money front is that you make profit rather than loss. Even if it is $10 profit, you should be happy with that.

This is because having specific financial goals it will just put you under even more pressure than you are already under when you are trading. You start to think, “I need to make $x this week to hit my target,” and then you start getting into all kinds of trades that you should have left alone. Sometimes the conditions are simply too choppy and they can stay that way for several days. You do not want to be feeling that you have to trade just to make your $x.

Instead, focus on what you need to learn or master and express your goals in that way. For example, developing new systems based on different indicators, even if you only use them in demo accounts. This can add a breadth to your trading and may be useful if you happen upon something that works. Or keep records of how many times you deviated from your system and have a goal of getting this down to zero.

FX Currency Trading Plan For Trades

Your actual day to day trading plan is more about your position size, stop losses, close point for a successful trade, etc. In this case you do have a profit target, expressed in terms of the number of pips you will take if the trade is profitable. It is not a good idea to let trades drift, hoping for unlimited profits. Some people do only close out half of their position at a certain point, it is true, but if you are going to do that it should be a written part of your plan, not a snap decision.

Do not carry your planned strategy in your head where you can easily be tempted to change it. Write it down along with the rules of your trade in terms of the signals that you will act on. That way everything is clear and you can offload some of the stress onto the paper. FX currency trading is a stressful as well as a risky business, and having a well thought plan is vital to the success of your enterprise.

Filed under: Secrets To Success

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