We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
  • The week saw a slightly more dovish than expected RBA minutes increase the importance of the latest labour market report, which showed an uptick in the unemployment rate to 5.3%. Where is $AUDUSD heading? Find out from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/gmGjlGBvjv
  • #OOTT https://t.co/TLgP7dUqFv
Becoming a Better Trader: How to Construct a Trading Plan

Becoming a Better Trader: How to Construct a Trading Plan

2017-08-10 13:09:00
Paul Robinson, Currency Strategist
Share:

DailyFX analysts hold live events daily, for details please see the Webinar Calendar.

Today, we discussed a very important aspect to trading – having a trading plan. Just like anything we set out to do, having a trading plan is imperative for setting one’s self up for success. It doesn’t need to be a book, but it does need to cover a few key topics. The following are the important points we discussed and should be in every traders trading plan.

Most paramount is having a sound set of risk management rules. This pertains to not only each individual trade but also the entire account. Knowing how much you are willing to risk per trade and being able to fully accept the risk helps alleviate stress often caused by over-sizing a trade. So know your risk tolerance. You need to also have a plan for handling multiple positions – how many is a max and how much total risk will you take on all positions combined. Knowing how each trade is correlated is important here for helping determine your overall risk. You have to assume all trades could turn into losers, so what is that total amount you are willing to lose?

Know your toolbox and the types of analysis you will use. The acronym I like to use is K.I.S.S. Many of you are probably familiar with what it stands for, but for those who aren’t – Keep It Simple Stupid. Keep your analysis as simple as possible, but not so simple it isn’t realistic. Meaning, you want to use a select number of tools or methodologies which don’t have redundancies. Too many forms of analysis can cause paralysis by analysis through mind-clutter. So, know how you identify trades, and keep it simple.

Check out our Q3 Forecasts for our take on where markets are heading.

Identify your favorite trade set-ups and stick to only those. Knowing what kind of set-ups you best execute is important to consistency. Take snapshots of trades which worked out for you, and even those which you find a pattern of not working out. File them away and review them to keep yourself focused on only those set-ups which work best for you.

Have a plan for handling both adversity and success. Have a circuit-breaker in place in the event losses start to pile up. If you start having a material draw-down you need to stop the bleeding and figure out why you are struggling. It could be poor trade mechanics or it could be a market environment not conducive to your style of trading. It’s a good idea to step away from the market when going through a tough period. It helps clear your head and allows you to figure things out while not in the heat of battle. And don’t worry about missing the next ‘big’ trade, the market will be there when you return.

When doing well, there is a tendency to become overconfident and become overly aggressive. You want to have a plan for keeping yourself in check, because if you don’t that good period of trading will turn into a bad one. Going through trades and making sure you are executing them well is a good idea. Keeps you focused on the process and pointed in the right direction.

For the full conversation, please see the video above…

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.