Do YOU have a ROBUST forex trading plan?

The Importance of a Forex Trading Plan

Why do you want to trade forex? I am sure you want to make money. You need to treat this like a real business.A successful business has a writting business plan.If you want to be a successful forex trader, you need to write out your very own forex trading plan.

Planning a specific set of rules for future events allows you to make better informed decisions.During extremely stressful market events, you can easily fall back on this material to help guide your decisions.Most aspiring currency traders believe the pros trade with no emotions.This is entirely false.

Each person endures emotions when making decisions, especially those which involve money.How you choose to deal with these decisions and which actions you take will be a major factor in your monthly profits or losses.

When you are not trading, you are not emotionally involved in trading. This is the ideal time to take a few moments and draw up your trading plan.Your mind is more objective when you are not emotionally distracted in a trade.I suggest taking 2 hours of your time and visiting a local coffee shop. Enjoy this simple process of finding out what you want as a forex trader.
You will soon find out the answers you come up with will help you make better decisions to any market situation you are faced with in the future.You can quickly check your ideas and rules to find out what you had planned for this specific event.These 2 hours spent at the coffe shop will reap big rewards in just a few months.

The currency markets are volatile and will always present challenges.This is a fact. If you can not deal with this, you should avoid trading forex altogether.You can identify some of these challenges with the list of questions which follow.

How do I define my trading edge?Do I believe in my specific trade setups?Which currency pairs do I want to trade?What types of entry orders will I use to place trades?Where will I put my stop loss? Will I use my strategy in multiple time frames or just one time frame?What is my initial profit target?How much am I willing to lose per trade?How much am I willing to lose per day? week? month? What is the maximum drawdown percent I'm willing to withstand?How many trades do I want to take per day? week? month?

Your answers to these questions form the basis for your forex trading plan.Write these out in a simple manner.Your objective is to have one of your friends completely understand these and if they had to step in and manage your trades, they could do so by following what you wrote down.

You will be much better prepared to manage your trading as a business with this approach.You will no longer react because you have a plan in place.Most beginning forex traders search for the holy grail trading system. But they fail to realize implementing a trading plan around a simple forex trading system is one of the keys to success.

If your trading plan is flawed, you will lose money. But if your trading plan is well-defined and you still lose money, you need to find a new trading strategy.

Take a few moments and build your own list of questions. Find a simple and profitable forex trading strategy. Learn how it works and then write your forex trading plan to fit your style of trading.

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Why Trading Currencies For A Firm Is A Lot Different To Trading From Home

There are various ways to trade the currency markets. You can try and get a job in the City where you work for a bank and they will pay you to trade the markets (using their money), or you can trade the markets yourself using your own money. It is important to note that working in the City is a lot different to working from home.

For a start you will find that there are a lot of barriers to entry with regards to getting a job in the City. You can't just walk into the centre of London and ask for a job with a top bank. You often need at least a very good degree, and often a postgraduate degree as well. It is possible to get a trainee job without a degree in some cases, but you often need very good contacts to get these kind of jobs.

If you want to trade the markets from home, however, it is a lot easier. All you need is access to the internet and some capital that you can trade with. It doesn't have to be thousands of dollars, but you do need a decent amount if you are going to live on your profits.
This itself is a big difference because when you work for a bank you can trade the markets using the bank's money. You will be expected to make a profit, and will be rewarded handsomely if you do, but you can still rest assured that you will receive a very good salary in the process.

When you work for yourself, your salary is totally derived from your profits. So if you don't manage to make any money from your trading, you will not have any money to live on (unless of course you have other sources of income).

This means that there are totally different pressures involved with each job. When you work in the City, you have an incentive to perform because there are big bonuses on offer if you do well. However this also means that traders often adopt a different mindset to those people who work from home trading their own money.

Traders in the City can afford to take more risks because they know it is not their money at stake. Self employed traders, however, have to be a lot more conservative and have to find a way to make money on a consistent basis so they can remain self employed and earn a good standard of living.

To some extent those people who work in the City have a much easier job. Whatever happens, they know that they will be well paid, and they also have a lot more tools at their disposal. For example they can use a top of the range terminal that can display lots of different charts at the same time, and they may also have access to live order flow data, which helps them predict the future direction of the markets.

So the point I want to get across is that working in the City and working from home is completely different, and involves totally different mindsets. The pressures from working from home are immense because failure simply isn't an option. You can of course get fired from your job in the City if you consistently lose money, but at least you will have earned a lot of money and received a generous compensation package before getting the boot.

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