Forex Trading Plan

I learned that a Forex trading plan is one of the most important pieces of the puzzle of becoming a consistently profitable Forex trader. Let's admit it like it or not we've all been brought up in a society that has some sort of boundaries or rules which in turn brings order and structure and a trading plan is just this. Having a written out pre-defined trading plan means I'm making an effort to hold myself accountable to something, this is necessary because there is no one to be accountable to as a trader.

It seems that my emotions can run wild especially when I start calling the trades correctly and over-confidence starts to kick in. One of the best ways to not let emotions influence my trading activities is to have a defined trading plan that describes in concrete terms what I will do in any given market scenario. Many traders do not attempt to have a trading plan because they aren’t really sure where to begin but in http://www.forextrainingworldwide.com/ website you will be able to download a trading plan template with a set number of questions and it's also designed in such a way allowing  you to add things to as you go along. 

I'm going to mention some of the key elements a trading plan should include

• Have a financial goal, after all that is why you are learning to trade.
•  It's important for me to keep a balance in my life, therefore I will have to decide in which time frame will suite me best. Forex Training Worldwide mentions the following "DO NOT CHANGE YOUR LIFE FOR TRADING. We can help you change trading to suit your life." This is very reassuring due to the fact I work nights and find myself asleep during the UK and US trading  timezones, but they have assisted me in finding a strategy that suites my requirements and lifestyle.
• I have to define my entry strategy, in other words create a mini check list which will identify that trade as grade 1,2 or 3
• Determining the risk to reward scenario on any potential trade setup
• Adjust my position size on the trade to meet my necessary stop-loss distance, NEVER adjust my stop-loss to meet a desired position size, this = GREED.
• Exit strategy  BEFORE entering the trade will this be a fixed profit target or will the trade be managed with a fluid stop loss.

There is no concrete way to make a good trading plan but at least my mentor has supplied me with a good template which sets me on the right path and in time eventually I will add my own ideas or concepts. One of the key thing to remember is that the whole point of a trading plan is to keep me accountable and to keep me on track of objective thinking and this is really the only effective way to consciously make an effort at eliminating emotional trading mistakes.

Lets see if I can practice what I've learned.