Your business plan is your blueprint for successful trading in Forex market. It includes not only your goals but also detailed plan of how you are going to get there. This plan should go beyond your regular daily trading plan. It should include the structure not only your trading circumstances but the whole life. Your mind and psychology is the main assets in your trading. How are you going to protect it during the trading year?
Your business plan should be structured in a way to motivate you to make more profit on your account. It may sound like a cliché but you really need to apply an effort to get out of any drawdown in your account. You need to have a risk value in your plan that you are willing to take. Your trading plan should include such parameters like currency pairs you trade, trading systems you will be using and what leverage and risk you are taking in each trade. Only this way you will be able to avoid emotional decisions.
What kind of goals should you set in your plan? You can structure your goals in two ways. Some people prefer to see their goals in dollar value. I usually avoid setting goals this way. Instead what I set goals related to my trading activity. Take certain number of trades during the week. Or my goal could be to test the strategy on a certain amount of historical data. At the end I evaluate if I accomplished everything that I have planned and the profit will follow. Sometimes setting the dollar value as your goal can be really discouraging at times when market goes against you and you have a few consequent losses. That can provoke you to take unnecessary risk.
For many people the best goal can be to make certain number of trades in certain period of time on a regular basis. This will help you to reach the greater goals. Since profit and losses will be distributed in your trading very non-uniformly then setting dollar value goals may distract you from successful trading. Say you already achieved your dollar value for the week should you stop trading until next week. I would say no. If you feel yourself in the zone continue trading. If you lost more than you expected should you take trades that don't fit your plan. Of course not, or you will ruin the gains of the previous week.
So the bottom line is you should have a business plan that sets the bigger picture goals and a pathway to achieve them. Your trading plan should be a part of your business plan that incorporates trading strategy and money management and regulates your day-to-day trading activity.
Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trading Forex. |
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