When people start trading, they focus on finding the most profitable trading strategy. After choosing the right strategy, traders usually think that they will make a profit as long as they apply it. But traders usually forget one thing-trading plan.

A transaction plan is a written list of actions that need to be completed in order to achieve a transaction goal. This list can contain a detailed description of the transaction method or transaction process.

In order to make a trader’s trading strategy profitable, the plan provides traders with answers to what should be done, why, how and when.

Why do you need a trading plan? When a smart person starts a business, the first thing he should do is write a business plan. In this plan, he describes his goal, the steps to reach it, and all aspects of his business.

Having a clear goal is one of the key factors for a trader’s success.

The same is true for trading. Traders should develop a trading plan before starting to work in the currency market . When executing a trading plan, careful planning, discipline and caution are required.

Having a clear goal is one of the key factors for a trader’s success. This clear plan prompts the trader to implement his intentions. In addition, it provides an opportunity to compare the results obtained with the planned results. Without a plan, it is difficult to determine whether the transaction has reached its goal.

Another benefit of the trading plan is that it helps traders make the right decisions in emergency situations. Since market conditions often change, it is very important to know how to deal with one situation or another. Therefore, the trading plan provides an opportunity for self-control.

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Contents of the trading plan

There are no specific rules about what a trading plan should look like and what it should include. Its content usually depends on the trader, because the plan is made at its convenience.

However, the content of a trading plan can be divided into three main parts:

  • Personal plan
  • business plan;
  • Trading plan.

The personal section should contain personal views about the trader’s goals, motivations, and ways to succeed. You must believe this point of view and work hard to implement it in real life, no matter what obstacles may arise.

The personal part should not be related to any technological status quo, but only related to desires, desires and expectations of the transaction process. For example, the trader expects that the transaction will give him more time to spend with his family.

The business part contains everything about trading: the knowledge and skills the trader wants to use. In order to improve trading skills, a trading goal should also be set. If the goal has nothing to do with money, but with the progress of the transaction, it would be better. For example, the first year’s trading goal is to increase trading volume and reduce losses.

In order to avoid the losses they may cause, traders should also consider all the shortcomings of the foreign exchange market.

The transaction part is the most important part of the plan. It contains a step-by-step description of the transaction process. For example, time period, preferred strategy, trading conditions, trading volume, etc.

The financial part will not play the final role in the transaction. Therefore, you should consider money management. It is very important to protect the account from rapid depletion of funds. In order to achieve this, the trader should decide which part of his balance to use in the transaction. For the expected profit, it should be calculated and added to the trading plan.

The worst possible scenarios should be foreseen, and they should not surprise traders.

The last thing that should be pointed out is the use of emergency plans in case of emergencies. This is the key to traders knowing how to deal with this situation. The worst possible scenarios should be foreseen, and they should not surprise traders.

After the trading plan is ready, you should execute it. Note that when trading, in order to compare actual results with planned results, you need to record what has been done.

So, haven’t you developed a trading plan? Now is the time to start planning your trading process. The trading plan is your method for comfortable, successful and profitable trading. So, don’t waste your time, start making your plan!

If you fail to make a plan, your plan will fail!

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