Forex Traders: Trade Your Plan!
By: Harold Hsu | Posted: 24th January 2008
Before you can trade profitably, you’ll first need to have a reliable trading plan. Almost everyone knows that. After all, your job as a trader is to follow your trading plan, isn’t it?
While this may be a shamefully obvious fact, you’d be surprised to know that many Forex traders don’t follow this simple piece of advice! Not surprisingly, these are the same traders that usually wipe out their trading accounts in a short period of time.
Always remember: Your job as a trader is to follow a trading plan!
…and guess who’s going to write this trading plan?
Yup, you’ve guessed it… You are!
And don’t just take this as a figure of speech… you’ll actually need to WRITE your trading plan down in pen and paper! Always keep a copy of your trading plan in front of you (at the desktop) when you trade.
You have a trading plan for a very good reason: it keeps you disciplined in your trades. There will definitely be times when your emotions will get the better of you… and it’s your trading plan that’s going to save your from entering into any “emotionally-charged” trades.
It’s easy to have a trading plan; the difficult part is always obeying its rules. Having your trading plan in front of you at all times will constantly remind you not to trade against its rules.
All good trading plans must have (at least) these 3 aspects:
1) Entry criteria (trade setup criteria)
2) Exit criteria (trade exit criteria)
3) Money Management (maximum allowable open trade positions)
These aspects are absolutely crucial in determining your success as a trader. Please don’t take them lightly.
Always keep a physical copy of your trading plan right in front of you. It may sound silly to you now, but trust me: you’ll start taking it seriously when it saves you from making a potentially emotional (and largely unprofitable) trade!
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.
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Tags: good reason, period of time, job, short period, emotions, piece of advice, money management, forex traders, pen and paper, trades, trading accounts