How to Arrange a Good Trading Plan?

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How to Arrange a Good Trading Plan?

Forex trading is one sector where the market can change significantly in a short time. The market is very dynamic, even on some occasions it can be said to be “wild”. If you can’t adjust to the super-dynamic market changes, you will be overwhelmed.

To anticipate it you need a good trading plan . You have to design in such a way that with this trading plan you will still be able to calm down even when facing extreme changes in the situation.

Pay attention to details

The trading plan that you have should be as detailed as possible.

If during this time your trading plan only contains (for example) like this:

Capital : $ 10,000
Maximum risk : 50% of capital ($ 5,000)
Risk per transaction : $ 500

then it’s good to complete a little more like this:

Capital : $ 10,000
Maximum risk : 50% of capital ($ 5,000)
Risk per transaction : 5% of initial capital
Risk-to-reward ratio (RRR) : 1: 1
Strategy : Swing trading
Trading system : Fibonacci Retracement + Stochastic + CCI, time-frame H1
Entry : Wait for correction to 38.2-61.8 area, look for a signal on stochastic + CCI
Exit : Stop Loss (SL) in the area of ​​61.8-76.4 Fibonacci Retracement (cut loss) Take Profit (TP) in the area of ​​23.6-0.0 Fibonacci Retracement (adjust the risk per transaction 5% and RRR)

Thus every action you will take has a clear basis. You know how much risk you will face, how much profit potential, how much lot you have to open, what is the basis for making decisions (buy, sell, or close positions).

The more detailed your trading plan , the easier you make decisions in forex trading .

Well, for example, for example you do an analysis like this:

“Prices move in an uptrend. Intraday bias is bullish. Correction has occurred to the Fibonacci retracement area of ​​38.2-61.8. Bullish signals are seen from hourly stochastic and CCI. The SL area is 450 pips from the current price. “

With a more detailed trading plan like the example above, you don’t need to think long enough to decide to open a BUY position of 1.1 LOT and install SL and TP according to the trading plan .

Pay attention to Flexibility

Even though we have prepared a trading plan in detail, it does not mean that the trading plan must be implemented rigidly. Discipline is necessary, but on the other hand flexibility is also necessary.

Being flexible is not the same as being undisciplined. On the other hand, discipline also does not mean rigid. In terms of running a trading plan , there are several things that you can give concessions.

For example, when the price hasn’t touched the SL or TP level, but technically you see that it’s time to close your position. In such situations, it is fine if you close your position even though the risk has not been touched or profits have not reached the target.

But of course the decision must be based on objective technical analysis, not just because of fear alone (psychological factors); for example, fearing the profits that have been gained turn into losses.

Another form of flexibility is to “increase” risk tolerance per transaction.If you initially set a 5% risk of capital for each transaction (as in the example of the trading plan above), then you can then set a 5% risk per transaction from the last equity.

For example, from a capital of $ 10,000 it can grow to $ 15,000. Well, if you previously set a risk tolerance per transaction is $ 500 (5% of $ 10,000), then after equity becomes $ 15,000 the risk tolerance per transaction changes to $ 750.

All of these are forms of flexibility that do not violate your discipline in carrying out a trading plan.

Backup Plan

Remember that we can only make plans but cannot set the direction in which the market will move. Risks may occur and losses may come to you at any time.

Fortunately, the trading plan has provided guidance on what to do when risks occur.

As with the example of the trading plan above, the maximum risk has been limited to 50% of the initial capital. The question then is: what if you really lost up to 50% of initial capital?

If you do not want to trade anymore when you have lost 50% of the initial capital, then the discussion will be completed here.

But when you decide to open an account with the capital of the initial amount of funds that you deposit, you are actually ready to face the risk of that size. That is, when you open a trading account with capital – for example – for $ 10,000, you should have prepared the money to invest with all the risks attached to it.

We do not prepare 50% of the capital without reason. The rest of the capital – if the risk does occur – from the beginning it was prepared as a backup plan. That is, you don’t send all your “troops” to the battlefield.There are half that are prepared in the “headquarters” to be sent again if the “first troops” fail to win.

If you want to continue the struggle with the remaining capital, then you must re-prepare the appropriate trading plan . In the example above, the remaining capital remains only $ 5,000. Thus, you can re-arrange a “battle strategy” for example like the following example:

Capital : $ 5,000
Maximum risk : 50% of capital ($ 2,500)
Risk per transaction : 5% of initial capital
Risk-to-reward ratio (RRR) : 1: 1
Strategy : Swing trading
Trading system : Fibonacci Retracement + Stochastic + CCI, time-frame H1
Entry : Wait for correction to 38.2-61.8 area, look for a signal on stochastic + CCI
Exit : Stop Loss (SL) in the area of ​​61.8-76.4 Fibonacci Retracement (cut loss) Take Profit (TP) in the area of ​​23.6-0.0 Fibonacci Retracement (adjust the risk per transaction 5% and RRR)

You can see that even from the remaining $ 5,000, not all of them are “sent to the battlefield”. We still prepare half of them as “reserve troops”. So on.

Maybe trading plans like this are relatively new to you. Maybe not too.For those of you who want to try trading plans like this, please try the demo account first. Once you can control your capital properly, then you can immediately open a real account .

Good luck.

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Forex Signal 30 is the best forex system since 2009 and has been used by thousands of traders from around the world to generate profit in forex trading. This system is created by our team of Brilliant Forex Signal Team, this system is made as simple as possible for beginner and professional traders.
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