Having a Forex trading plan is one of the key elements to becoming a successful Forex trader. Many traders never even make a trading plan, let alone use one regularly. Read 10 Step For Perfect Trading Plan in Forex.

1. 10 Step For Perfect Trading Plan

2. Index
1. Trading Plan
2. 10 Step for Perfect Trading Plan
1. Skill Assessment
2. Mental Preparation
3. Set Risk Level
4. Set Goals
5. Do Homework
6. Trade Preparation
7. Set Exit Rules
8. Set Entry Rules
9. Keep Records
10. Perform a Post-Mortem

3. Trading Plan
 Once a trader knows where the market has
potential to pause or reverse, they must then
determine which one it will be and act
accordingly.
 A trading plan should be written in stone while
you are trading, but subject to re-evaluation once
the market has closed.
 It changes with the market conditions and adjusts
as the trader's skill level improves.

4.  Each trader should write their plan, taking into
account personal trading styles and goals.

6. 1. Skill Assessment
 Are you ready to trade?
 Have you tested system by paper trading it and
do you have confidence that it works?
 Can you follow the signals without hesitation?
 Trading in the markets is a battle of giving and
take.
 The real pros are prepared, and they take their
profits from the rest of the crowd who, lacking a
plan, give the money away through costly
mistakes.

7. 2. Mental Preparation
 How do you feel? Do you feel up to the challenge
ahead? If you are not psychologically and
emotionally ready to do battle in the markets, it is
better to take the day off.
 Otherwise, you risk losing your shirt.
 It is guaranteed to happen if you are angry,
preoccupied or otherwise distracted from the task
at hand.

8.  Many of the traders have a market mantra they
repeat before the day begins to get them ready.
 Create one that puts you in the trading position.

9. 3. Set Risk Level
 How much of your portfolio should you risk on
any one trade?
 It can range everywhere from around 1% to as
much as 5% of your portfolio on a given trading
day.
 It means if you lose that amount at any point in
the day, you get out and stay out.

10.  It will depend on your risk tolerance and trading
style.
 Better to keep the powder dry to fight another day
if things aren't going your way.

11. 4. Set Goals
 Before you enter a trade, set the realistic profit
targets and risk/reward ratios.
 What is the minimum risk/reward you will accept?
 Many of traders will not take a trade unless the
potential profit is at least 3 times greater than the
risk.

12.  Example: If your stop loss is a dollar loss per
share, your goal should be $3 profit.
 Set weekly, monthly and annual profit goals in the
dollars or as a percentage of the portfolio, and re-
assess them regularly.

13. 5. Do Your Homework
 Before the market opens, what is going on
around the world? Are overseas markets up or
down?
 Index futures are a good way of gauging the
market mood before the market opens.
 What economic or earnings data is due out and
when?

14.  Post a list on the wall in the front of you and
decide whether you want to trade ahead of an
important economic report.
 For most of the traders, it is better to wait till the
report is released than taking unnecessary risk.
 Pros trade based on the probabilities. They don't
gamble.

15. 6. Trade Preparation
 Whatever trading system and program you use,
label major and minor support and resistance
levels, set alerts for the entry and exit signals and
make sure all signals can be easily seen or
detected with the clear visual or auditory signal.
 Your trading area should not offer disturbances.
Remember, this is a business, and distractions
can be costly.

16. 7. Set Exit Rules
 Many Traders make the mistakes of
concentrating 90% or more of their efforts in
looking for the buy signals, but pay very little
attention to when and where to exit.
 Some Traders cannot sell if they are down
because they don't want to take the loss.
 Get over it, or you will not make it as a trader.

17.  If stop gets hit, it means you were wrong.
 Don't take it personally.
 Professional Traders lose more trades then they
still end up making profits.

18. 8. Set Entry Rules
 That comes after the tips for exit rules for a
reason: exits are very important than entries.
 Your system should be complicated enough to be
useful, but easy to facilitate snap decisions.
 If you have 20 conditions that must be met and
many are subjective, you will find it difficult if not
impossible to make trades.

19.  Computers don't have to think or feel good to
make the trade.
 If conditions are met, they enter. When the trade
goes in the wrong way or hits to profit target, they
exit.
 They don't get annoyed at the market or feel
strong after making a few good trades.
 Each decision is based on probabilities.

20. 9. Keep Records
 All good traders are also good to record keepers.
 If they win a trade, they want to know precisely
why and how.
 More importantly, they want to know the same
when they lose, so they don't repeat the
avoidable mistakes.

21.  Write down the details such as targets, the entry
and exit of each trade, the time, support and
resistance levels, a daily opening range, market
open and close for the day.
 Also, you should save the trading records so that
you can go back and analyze the profit or loss for
the particular system, draw-downs, average time
per trade and other important factors, and also
compare them to a buy-and-hold strategy.

22. 10. Perform a Post-Mortem
 After each trading day, adding up the profit or loss
is secondary to knowing the why and how.
 Write down your conclusions in the trading journal
so that you can reference them again later.

23. Thank You