Your Trading Plan starts here…

Traders-Live

Active Trader
Jul 22, 2010
33
0
37
South Africa
www.traders-live.com
Your Trading Plan
Your trading plan should be based around your investment objectives, your personality and your starting capital. Trading is different for everyone and it is important to have a plan that is realistic and reflects your unique personality and circumstances.
Constructing & Implementing – Your Trading Plan:

Do Your Homework
It is firstly essential to learn the basics, how and why markets move and research a method that you are comfortable with to trade: ie one that is based on sound methodology, and one you can trade with confidence, and discipline. So before you start to trade make sure you have good background knowledge on all aspects of trading. You would not try and drive a car without lessons, and the same is true of trading currencies. If you trade and “shoot from the hip”, or on tips from friends, and stories in the financial press, you are almost certainly going to end up a loser over time.

Match Your Method To Your Personality
It should be one you have decided you have confidence in and can implement with discipline. This may sound obvious, but many traders trade in a way that is totally opposed to their personality. For example, if you are impatient and hate giving back any profits then a long-term trend following system is not for you; you would probably be better suited to a shorter-term swing trading method.


Begin With A Simple Method
One fact that remains true is that simple systems work best for most traders. There is no link between the complexity of a method and how successful it is. Another advantage of simple systems is they are easy to understand and implement and this helps you stay disciplined in the face of the inevitable run of losing trades.


Begin With Sufficient Capital, Trade Small Positions And Diversify
The utopian dream is to start trading with a small amount of money and make it into a fortune in a few months. The reality is this is unlikely to happen to the majority who trade. The first thing to do when trading is start with enough capital to take a string of losses. The simple fact is: the less you start with the lower your odds of success. It’s a matter of logic. If you are hoping to get on board one big move, it may take ten consecutive losses before the winner comes. By then your capital could easily be depleted and the move you were hoping for comes without you being able to participate. Always start with enough capital to allow you to take a few losses. If you can you should hold a few trades in different areas to diversify your positions ie “don’t put all your eggs in one basket” and blow your money in one trade. To start with keep your position size small and spread the risk.


Make Objectives Realistic
What is realistic amount of profit to aim for annually on your starting capital? Many investors when asked this question simply say as much as possible. They have not sat down and thought about it, they simply have read stories of the minority who have made it big and want to do the same. The fact is that most traders’ start with unrealistic expectations and this leads them in to a false sense of security. They ignore the risks of trading; they concentrate too much in one trade and risk too much and end up losing.

So what is realistic?[/b]
Any trader who can achieve growth rates compounded of 30% + per annum is doing very well. Generally, a compound growth of 30 – 50% per annum would place you in the top 10% of traders that make money and this is a realistic goal if you do your homework.


Be Independent and Isolate Yourself
Emotions are your enemy when trading so it is important to be independent and follow your own path. It may sound lonely relying on yourself and is in fact uncomfortable to many but as time goes on your own opinion is just as valuable, perhaps more so than any others, experts or novice traders.

Don’t Lose Sight Of Your Ultimate Goal:
The ultimate goal of trading is to make money. There is no goal greater than this in trading. Though there are other benefits to trading self-satisfaction, competitiveness and the actual thrill, these are all secondary. If you seek revenge against the markets, other traders or merely want to compete for the sake of it, then the primary goal of speculating will be lost and so will your money.
 

AlbertPortsmith

Active Trader
Aug 25, 2010
8
0
32
Thanks for the valuable input and i feel that there is some thing more which i can add to it while pointing out the strategy for the plans..


like forecasting is the really vital determining factor...first just setting up the minor trend then look for the more resources and look back again the previous 5 hours of the market trend is a good deal and also must focus on the short term trend perhaps some western technical analysis trend is also a good way for the planning the strategy...

Thanks:
Albert.
 

sidhart

Active Trader
Sep 10, 2010
5
0
32
The concept of a plan is accepted as standard practice in every walk of life, whether in business or in our personal lives, yet in trading, many people neglect to develop such a plan. I have often tried to rationalise why it is that most traders have no plan whatsoever. It seems to be a combination of several factors but the primary ones, I believe are as follows:

o They have no idea how to write one

o They do not consider it necessary

o It is boring

o They have a mental plan
 

cheeseweasel

Active Trader
Sep 23, 2010
14
0
32
www.forextradingzen.net
The concept of a plan is accepted as standard practice in every walk of life, whether in business or in our personal lives, yet in trading, many people neglect to develop such a plan. I have often tried to rationalise why it is that most traders have no plan whatsoever. It seems to be a combination of several factors but the primary ones, I believe are as follows:

o They have no idea how to write one

o They do not consider it necessary

o It is boring

o They have a mental plan

I think that the main reason is that most people don't treat currency trading as a business. It's not taken seriously.

It doesn't help that system salesmen will perpetuate the myth that all you need is a good system and you can pretty much print money. Why would you need a plan if all you need is a good system?

And thanks to the original poster for this - a trading plan is essential. It doesn't have to be complicated (I like simple plans!), but without one I believe you're doomed to failure.