This series is going to focus on the discipline and psychology of trading and I will be adding updates about once a week. The first article is about getting prepared to start trading if you are a Forex beginner. A trading plan can also be used for a profitable trader that wants to analyze his current trading so that he may be more profitable.
The first thing that any trader should have is a trading plan that will map out how the trader plans to do business. A business has a business plan so trading should be no different because you should treat your trading as a business. The old saying may be old but it is true if you don’t have a plan than you are planning to fail. The trading plan should be thorough and thought out and should be written down reviewed often.
You may be asking what should be included in your trading plan? I have prepared a list that might help you get started to prepare a trading plan for yourself. So make sure you include your goals and mindset, your broker and trading platform, trading system and strategy, money management procedures. There also should be documentation of each trade made so that you can analyze your system, which will help out to show the results of your trading. Also include whether you will add additional deposits and withdrawal procedures and how you plan to invest the profits. Trading is not as simple as it may seem and there is quite a bit of planning involved.
After your plan is complete it should be printed and reviewed to see how your are performing according to the plans goals. At the review session is when you should make changes if certain areas of your trading plan are not working for you and or not achieving the goals you have set. A plan is never set in stone it is to be used as a guide to help you understand if what you are doing is working or not. If your plan is not working make adjustments to test your plan.
In this series I am going to be looking in depth at each of these individual areas of the plan and how to get the most of your plan. So check back each week to learn how to put your trading plan together so that you will not enter the Forex market unprepared without a plan.