Trading forex without a trading plan is one of the biggest mistakes new traders are making. Before you start trading you should know that having a forex trading plan is one of the most important pieces of the puzzle for becoming a consistently successful forex trader. Many of the forex traders who are new in the forex market are trading without forex trading plan which is leading them to losing the account.
Having a written plan means you are making an effort to hold yourself accountable to something pre-defined. The whole point of having a forex trading plan is to have a physical reminder of what’s the best thing for you to do as a forex trader in any given time. Being a successful forex trader means being very self-disciplined trader who is going to follow his own trading plan which will keep him or her on a successful trading path.
The essentials for every forex trading plan are to let profits run while a favorable trend continues, and cut losses before you lose too much. Also it is essential to set specific objectives such as target return on risk capital and expected percentage gain on earning trades. Other essentials are: Determine when to enter and when to exit a trade, setting up stop losses on any trade, set limit roles on how much you are able to lose on any trade etc.
It is very important after you create your own forex trading plan to stick to it without letting your emotions get involved in the determination process of your plan. One of the best ways not to let your emotions influence your trading activities is to follow your forex trading plan no matter what’s going on in the forex market. Basically this means that you should enter or exit trades like a robot according your forex trading plan.
This article has supplied you with the reasons why you need to have a forex trading plan and some very good ideas about what you need to include in your forex trading plan. In order for you to become a very successful trader you should create your own forex trading plan and be very disciplined and accountable to yourself and follow your plan.