Here we try to learn what is required to to plan a trade on daily basis.
These are the necessary components of a Forex trading plan, you can add more if you like, but don’t get too carried away otherwise your plan will become too long and complicated for you to follow. I will give you examples of each of these in the section that follows:
• Begin your trading plan with a positive affirmation that you read aloud
• State your short-term and long-term goals in trading the markets
• Define your trading strategy and all aspects of how you will analyze and trade the markets
• Define your money management strategy, this includes things like risk and reward per trade; what reward is realistic given the market conditions? What dollar amount am I OK with losing per trade? What’s my long-term strategy for withdrawing money from my account.how much money do I want to withdraw each month after I become profitable?
• Miscellaneous components to check: things like, major currency pair, trading time, news events, etc
• Make yourself double-check everything before entering the trade, and ask yourself this question “Is this trade jumping off the chart at me basically telling me I’m stupid if I don’t trade it, or did I have to think about it for an hour and justify the setup by reading 20 different Forex blogs?”
• End your trading plan
• Daily trading affirmation:
I will never enter a trade without first consulting my trading plan, because my trading plan is what keeps me objective and eliminates emotion from my trading, and that is what will make me consistently profitable over the long-term
When I enter a trade, I will not touch the trade or edit the trade, removing all emotions and remaining firm on my initial observations
• Trading goals:
Short-term trading goals: To make consistent profits each month and supplement the monthly income from my job. To be a patient and disciplined trader who follows my plan.
Long-term trading goals: To build my trading account up to $25,000 through mastery of my trading strategy, patience, and the discipline to follow my trading plan every time I trade.
To avoid over trading, be patient, remain disciplined and stick to my plan always.
• Forex trading strategy:
This is the process I will use to scan the markets for potential price action trade setups:
1. Analyze the market conditions: is the market trending or consolidating?
You need to first determine what condition the market is in. I teach traders how to identify trending and consolidating markets in my trading course, but, basically you just need to identify the general direction a market is moving and try to trade with that direction. We are looking for higher highs and higher lows in an uptrend and lower highs and lower lows in a downtrend.. For consolidating markets we are looking for a market that is consolidating between an obvious support and resistance level. So, in your trading plan you might have a picture like this or similar to remind you of what you generally should look for.
2. Determine the core daily support and resistance levels and draw them on the charts
After you determine whether the market is trending up, down, or consolidating sideways, you need to draw in the core support and resistance levels on the chart. These are going to be the confluent value areas that you watch for Price action strategies to form near to trade back in the direction of the dominant market momentum
There is Price action trading strategies pin bars, inside bars and fakeys.
3. You have to know exactly what price action strategies you are looking for before you build your trading plan.
4. Remember, we want to always calculate risk based off dollars, not pips or percentages.
5. Which major pair you choose Like...EURUSD, GBPUSD, AUDUSD, USDJPY, EUJPY, GBPJPY, USDCAD, USDCHF, NZDUSD?
6. Must check upcoming economic news to see if an important release is about to be released.
These Points are required for making a daily plan.