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Apr 3
8.1 A Forex Trading Plan

 

How Forex Trading Plan should look like. An example is given below.:
All professional Traders have a forex trading plan. Forex Trading require good planning and discipline, those traders who do not have them are destined to fail. I have an example Forex Trading Plan as follow:
My goal is to generate 40 ticks or $400 in a day over the 20 day forex trading phase.
My Forex Trading Market is EUR/USD spot. Forex trading is day trading style with all trades are undertaken during day time between 8:30 am and 11:00 am on class days. On particular event I will make an effort to begin trading at 7:20 am because a large number of economic information is available at 7:30 am CST. When the class ends all positions will be closed.
Research and Fundamentals. On every new day before forex trading I decide my forex trading plan for the day. Before beginning my forex trading day I will also research fundamental information linked to the forex trading markets. I make all this effort for forex trading to understand the complete macro trends, world events, and future economic information. I will also observe the technical information of the past several days to determine what technical movement has been available.
Charts:
Candlesticks charts are significant for the forex trading. The charts I will use will be of two types, 5 min chart and 4 hour chart, 4 hours charts will be used to identify the major trends and the 5 minute chars will be used to get minor trend timing.
Strategy:
I have to establish a minor trend before anything else. Given the amount of time I will observe the 4 hours chart to have a vast understanding of the market that I have to trade. I think it is of paramount importance to concentrate on the short term trend. If there is strengthening or any other non committal movement on the minor trend, in this case I will keep distance from the forex trading till a trend show itself. I will use western scientific examination (DailyFX resistance/support, Moving Averages) to get a over all view of that direction the market is going and eastern scientific examination to time my going in and leaving points. Although scientific examination is the basis for my forex trading, if there is underlying data that comes out that visibly swings the forex trading market in opposition to the forex trading trend I will go with the power of the response in the direction of the underlying information.
My first step will be to find out that the short term trend is bearish or bullish.
I will examine to observe it there are any main psychological figures and support/resistance points in the immediate future.
If none, in this case I will go for long or short term depending on the shot term trend.
In case there are, then I will stay until the market achieve those numbers to look for U-turn.
I will not trade in favor of the forex trading trend if I find a candlestick u-turn pattern with affirmation (Bullish Engulfing, Hammer, Morning Star, Shooting Star)
Once forex trading not in favor of the short term trend, I will set my limit at 50% tall tale retracement level.
Rules of the Plan:
Not to trade during merging
When MAs cross against a position, always close out a trade.
Emphasize in achieving 10 tics on each trade, 1 lot = 10 tics, 2 lots = 5X2 etc.
40 tics stop set.
Short term trend should correspond with the momentum while observing entry point into a trade
Leave the trade before the economic date is issued
Do not trade when only 10 minutes class time remaining
Leave the trade the moment you feel it is going against you.
Example of Forex Trading Plan:
Research::
Fundamental Economic Information: Briefing.com, Bloomberg.com, DJIA, NASDAQ, FTSE:
Purpose:
To earn on an average of 50 tics in a day, or 500$ in a day.
Market :
Day forex trading will take place on the EUR/USD spot market. Trades will occur in the course of defined forex trading phase. Not more than 24 hours positions will be held.
Recognition of the trend. Main forex trading trends will be recognized employing the moving averages on the 4 hour chat. 5 minutes charts will be recognized employing minor trends. To determine minor trend, moving average will be employed. Providing 10 Period MA is >20 Period MA, uptrend is present trend. If 20 Period is < 10 Period, downtrend is present trend.
All trades will tag along the main forex trading trend, unless exempted.
A trades will take place employing 5 minute chart.
Each trade will be set for trailing stop loss.
For each trade, limit orders will be placed, and can be moved if stop loss is also moved.
Trader can add to a successful rank.
If trader fits plan, trader can double down on losing position.
Equity of no more than 2% shall be lost in a day.
Five (5) minute forex trading Chart on Long/short entry points. When any of the following conditions hold.
Point where 10 Period MA crosses 20 Period MA.
Present Price is below/above 200 Period MA.
Momentum is above .0015 and positive (negative) sloping.
Candlestick reversal pattern
Five (5) minute forex trading chart on exit point. When any of the following conditions hold.
Limit of profit is reached.
Uneasy situation of the trader
Forex Trading Trend Exceptions :
A. Forex Trading may take place against the major trend because of moving average cross on the 5 minute chart.
B. Forex Trading on the basis of underlying news may take place irrespective of the trend.

How Forex Trading Plan should look like. An example is given below.:

All professional Traders have a forex trading plan. Forex Trading require good planning and discipline, those traders who do not have them are destined to fail. I have an example Forex Trading Plan as follow:

My goal is to generate 40 ticks or $400 in a day over the 20 day forex trading phase.

My Forex Trading Market is EUR/USD spot. Forex trading is day trading style with all trades are undertaken during day time between 8:30 am and 11:00 am on class days. On particular event I will make an effort to begin trading at 7:20 am because a large number of economic information is available at 7:30 am CST. When the class ends all positions will be closed.

Research and Fundamentals. On every new day before forex trading I decide my forex trading plan for the day. Before beginning my forex trading day I will also research fundamental information linked to the forex trading markets. I make all this effort for forex trading to understand the complete macro trends, world events, and future economic information. I will also observe the technical information of the past several days to determine what technical movement has been available.

 

Charts:

Candlesticks charts are significant for the forex trading. The charts I will use will be of two types, 5 min chart and 4 hour chart, 4 hours charts will be used to identify the major trends and the 5 minute chars will be used to get minor trend timing.


Strategy:

I have to establish a minor trend before anything else. Given the amount of time I will observe the 4 hours chart to have a vast understanding of the market that I have to trade. I think it is of paramount importance to concentrate on the short term trend. If there is strengthening or any other non committal movement on the minor trend, in this case I will keep distance from the forex trading till a trend show itself. I will use western scientific examination (DailyFX resistance/support, Moving Averages) to get a over all view of that direction the market is going and eastern scientific examination to time my going in and leaving points. Although scientific examination is the basis for my forex trading, if there is underlying data that comes out that visibly swings the forex trading market in opposition to the forex trading trend I will go with the power of the response in the direction of the underlying information.

My first step will be to find out that the short term trend is bearish or bullish.

I will examine to observe it there are any main psychological figures and support/resistance points in the immediate future.

If none, in this case I will go for long or short term depending on the shot term trend.

In case there are, then I will stay until the market achieve those numbers to look for U-turn.

I will not trade in favor of the forex trading trend if I find a candlestick u-turn pattern with affirmation (Bullish Engulfing, Hammer, Morning Star, Shooting Star)

Once forex trading not in favor of the short term trend, I will set my limit at 50% tall tale retracement level.

 

Rules of the Plan:


  • Not to trade during merging
  • When MAs cross against a position, always close out a trade.
  • Emphasize in achieving 10 tics on each trade, 1 lot = 10 tics, 2 lots = 5X2 etc.
  • 40 tics stop set.
  • Short term trend should correspond with the momentum while observing entry point into a trade
  • Leave the trade before the economic date is issued
  • Do not trade when only 10 minutes class time remaining
  • Leave the trade the moment you feel it is going against you.
  • Example of Forex Trading Plan:

 

 

Research::

Fundamental Economic Information: Briefing.com, Bloomberg.com, DJIA, NASDAQ, FTSE:

 

Purpose:

To earn on an average of 50 pips in a day, or 500$ in a day.

 

Market :

Day forex trading will take place on the EUR/USD spot market. Trades will occur in the course of defined forex trading phase. Not more than 24 hours positions will be held.

Recognition of the trend. Main forex trading trends will be recognized employing the moving averages on the 4 hour chat. 5 minutes charts will be recognized employing minor trends. To determine minor trend, moving average will be employed. Providing 10 Period MA is >20 Period MA, uptrend is present trend. If 20 Period is < 10 Period, downtrend is present trend.

  • All trades will tag along the main forex trading trend, unless exempted.
  • A trades will take place employing 5 minute chart.
  • Each trade will be set for trailing stop loss.
  • For each trade, limit orders will be placed, and can be moved if stop loss is also moved.
  • Trader can add to a successful rank.
  • If trader fits plan, trader can double down on losing position.
  • Equity of no more than 2% shall be lost in a day.

Five (5) minute forex trading Chart on Long/short entry points. When any of the following conditions hold.

 

  • Point where 10 Period MA crosses 20 Period MA.
  • Present Price is below/above 200 Period MA.
  • Momentum is above .0015 and positive (negative) sloping.
  • Candlestick reversal pattern

Five (5) minute forex trading chart on exit point. When any of the following conditions hold.

 

  • Limit of profit is reached.
  • Uneasy situation of the trader

 

Forex Trading Trend Exceptions :

 

A. Forex Trading may take place against the major trend because of moving average cross on the 5 minute chart.

B. Forex Trading on the basis of underlying news may take place irrespective of the trend.

 

 



 

Trading Guide

 

8.1 A Forex Trading Plan

8.2 Forex Training: What to Look For in a Forex Training

8.3 Forex Course: A Quick Forex Guide for Traders

8.4 3 Lessons Learned from Ace Investors

8.5 How do Top Traders Trade?

8.6 Managing Your Trade

8.7 There Are Clues All Around You

 

 


 

Forex Education

 

The Basics of Currency Forex Trading

Technical Analysis

Technical Indicators

Fundamental Analysis

Intraday Trading

Emotional & Behavioral Part

Risk & Money Management