So what are some of the trading strategies Forex investors should put into their trading plan?
WHAT IS IN A TRADING PLAN?
A good forex trading plan covers a number of key points:
* What currency pairs will I trade? One or many?
* Am I mainly a day trader or will I hold for a few days?
* What is my profit target?
* How much am I willing to lose per trade?
* If I am day trading, will I stop for the day after a number of consecutive losses?
* Am I a technical trader or a fundamental trader or both?
* Where will I get my news or data from?
* How am I evaluating each trade?
* How will I use stop losses and take profits to control my risk?
* What is my available capital, and how will it affect me if I lose all of it?
TIPS TO MANAGE YOUR TRADING
Sticking to your plan is crucial. If necessary keep a diary of your trades so you can check you are not making impulsive decisions, and to force you to follow your rules.
Make sure each trade fits within your plan before you trade. You are most rational before a trade and most irrational when it is live.
Using a demo account, offered by SVSFX, is a good way to get used to market conditions, but it is no substitute for using real money. SVSFX offer a capital protected account where you trade with your own money risk free for 10 days.
Always check the economic calendar before you trade, and see how it applies to your plan. When important economic data like employment reports or interest rate decisions are released is when the market is at its most volatile, make sure you are prepared.
Decide whether you are a fundamental trader, trading on news stories or financial data, or a technical trader, using charts and analytical tools. It is best to use a combination of both or at least learn how to do both to check your methodology.
Never risk more than you can afford to lose. Always make sure you have enough capital to trade another day.
Try to keep emotions in check. Don't try and get back on a losing trade by going 'all-in' on one. Stick with your strategy to try and gain it back slowly.
Your plan should be a reflection of your goals. If your goals or financial situation changes, so should your plan.
Set stop losses, and plan them carefully. Too tight, and you risk your trade being closed out with sudden market fluctuations. Not tight enough and you risk being caught out in a market that has turned against you. You can also set trailing stops. A trailing stop loss is a level set at a distance above or below the current price that adjusts as the price fluctuates. It is a technique often used in an attempt to protect profits without limiting potential gains.D OF FOREX TRADING OPPORTUNITY
SVS Securities PLC, authorised and regulated by the Financial Services Authority (FSA) and member of the London Stock Exchange offer forex trading on two platforms;
Webtrader, the easy to use trading platform with no downloads, tight fixed spreads, accessible anywhere with an internet connection.
Or MetaTrader, the world's most popular windows-based forex trading platform with a wealth of technical analysis tools for novices through to professional fund managers.
A Good Forex Trading Plan Keys - Lets Trade
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