5 Tips for a Disciplined Trader’s Forex Trading Plan
By: Adrian Friggieri
Forex trading like all day jobs that are so called ‘standard’ has its own discipline and rules. The difference is that the rules you would need to create to a certain extent. Here we try to see what you should add to your job rules. Use these as extra policies that should be added to your trader’s job contract with yourself! Discipline in anything we do in life is very important because helps us grow more mature and helps us understand better the way forward in a more realistic manner and approach.
The 5 Tips are:
1. Create a Forex trading plan
2. Stick to the Forex trading plan
3. Monitor your trades
4. Close losing trades
5. Keep on Learning
Create a Forex trading plan
Needless to say a lot on this point, if you do not have a Forex trading plan you have failed already before starting. Your trading plan is the route to your destination, will you drive without a steering wheel? I do not think so, so why trade without a trading plan?
Stick to the Forex trading plan
Forex trading plans are not to waste our time writing and researching, be bound and then left on a shelf to accumulate dust on them. Trading plans exist to be followed to dot. Even in adverse situations and in loss making days just stick to the plan and do not change it on the fly just to accommodate a trade.
Monitor your Trades
Although a lot of retail traders try to automate trading, you cannot make money by sleeping people! Monitor closely your trades and make sure that you are able to act on quick market changes. Sometimes is better to close a trade earlier and collect a few pips or breakeven rather than just get run out to the stop loss.
Close Losing Trades
If you have a trade that is a loser, do not worry, hit the close button and move on to the next trade setup. Do not revenge trade and do not try to widen the stop loss area just to try and think that the markets will move to by favor later on, just because later on will never arrive and you would end up with a bigger loss than what you planned for in your trading plan limits.
Keep on Learning
Forex needs you to be always at the top of the tops of knowledge. Never stop your learning curve and never say that you know it all. This would be the start of your end. Our life is not a destination but a journey, so keep on improving!