My Online Forex Trading Plan
I came across one of my trading plans recently, and while we are at this stage, I think it appropriate to share it.
I offer it as an addition to your current plan - I don't want to change you from your written course. But if there is a slim chance you are trading with thousands of dollars and DON'T have a plan ... well - here's one you will find easy to adapt to your own circumstances.
By the way - it is not an "Ingot Original" - I like to give credit for someone else's hard work - here is the link:
My Overall Objective
In the next five years I plan to retire. In order to help plan for my loss of salary, I have decided to begin trading foreign exchange to develop a small, but growing income stream which will be secondary at present, but which will be a replacement for my salary when I do leave my job. I will continue to keep working full time at present. My trading analysis and decisions will be done in the evenings and weekends.
I plan to start my trading with a cash sum of $10,000. If during the course of my initial trading, I exceed my targets then I will consider adding further funds. I propose to trade in currency using an on line FX broker and will be trading both long and short.
I will only trade the the major currency pairs using a mini account as follows :
Trades will be selected using a technical approach
Trades will be selected using daily, weekly and monthly charts
Trades will be selected using candle analysis, Multiple Moving Average Rainbow Charts, and Multiple Time-Frame Stochastics.
I will use the following rules :
- Every trade that I open will have an appropriate stop loss in place
- I will always place the stop loss at the same time as my trade
- I will never lower my stop loss
- Starting trade size to be one mini contract
- I will determine the weekly trend before making a trading decision
- I will not enter trades against the weekly trend
- I will not exceed 10:1 leverage preferring 5:1 if available
- My broker will be *** *** if the leverage available is compatible with this plan
- I will write down my rules in an unambiguous form
My money management will be dictated by the following rules.
- The maximum loss per trade to be 5% of capital
- The maximum number of open trades at one time to be 3
- Stop loss to be set at 200 pips below market price
I feel that a return of 50% on my trading capital should be achievable in the first year after costs. I have divided this into 12 equal amounts giving a monthly target of $420.
If I can repeat this consistently I will be doing better than most traders and can always factor the amounts up as my experience grows. I would be happy of this target is achieved in less than 12 months.
A target of $420 per month for the first 12 months is a total of $5000 for the year. This equates to 5000 pips of profit in the year. On full lots this would equate to $50,000 of profit trading single contracts.
I will keep a trading diary every day
I will keep a trading journal record of each trade including the following:
Price bought or sold
Position of stop loss
Time trade opened
Time trade closed
Profit or loss on the trade
A chart showing entry/exit if possible for further examination later
(I will print out a chart at the close of every trade)
A daily balance of the overall account position, including cash in the account and open positions value
A weekly summary of the total capital at risk
A monthly P/L summary of closed trades
At the end of each trading week I will summarise my activity and set guidelines designed to exploit strengths and minimise weaknesses in my trading rules.
This will prevent repetition of error, and boost confidence and skill
I will discuss my activities with a colleague or mentor each week in order to improve my strike rate
That may help some of you - if you have never had an actual trading plan before - use this.
Note that this is a TRADING PLAN.
It is not a TRADING STRATEGY.
Strategy is what we are grinding through right now.
As well, you should have a BUSINESS PLAN.
Don't beat yourself up if you haven't been organised like this before - but please - for your own financial future - get yourself organised and disciplined.
You will not become financially secure through good luck - it only happens as a result of planning.
Participating in this thread is good for my plan, and yours too.
Change is in the air.