Guest Commentary: Making Plans for the Year
Did you make any forex related New Year's Resolutions? If so, was it simply "make money in forex" or something a bit more detailed than that?
2012 already began but it's definitely not too late to make some plans for the New Year.
Getting into details means setting monthly goals. This should not be limited to the amount of money you make every month, but should also consist of other goals.
But before discussing such monthly checkups, the bigger question is: What do you want to achieve in forex trading? Do you want an occasional extra income? Do you want to make some money for a vacation? Do you want to become a pro?
A more definitive goal for 2012 can then help you break down the resolution into quarterly or preferably monthly milestones - points where you check up on your performance in various fields and move on from there.
- Number of monthly trades: In order to stay on track you can define a range of monthly trades. Going below this range means you've neglected forex trading. Going above the range is worse: it means that you got addicted. Checking the number of trades on a monthly basis can certainly keep you balanced.
- Position sizes: A more detailed resolution can be to stick to position sizes for the month, and change the sizes only once per month / once per quarter. This will help you stay balanced and also provide guidance for moving forward: if you had success for several months, perhaps you can increase position sizes.
- Money management: You can include a checkup on your money management behavior, current state of the account and similar issues on a monthly basis.
- Trade plan: The same goes rules work for the trade plan. Every plan needs occasional tweaking and some need to be totally replaced. One or two trades aren't enough. This is probably something you already do, but it's worth mentioning and emphasizing that one or two trades aren't enough to make a judgment.
Do you have a plan for 2012?
Further reading: 5 Most Predictable Currency Pairs – Q1 2012
By Yohay Elam, Forex Crunch
Would you like to see more third-party contributors on DailyFX? For questions and comments, please send them to firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.