One of the leading causes for the failure of many businesses is their lack of planning. If you want to be successful in life and business, you need to have a plan for how to obtain that success. Trading is no different from any other business. It is important to have a written business plan…
What “toys” will you use for your forex trading profession? Write down the hardware, software, data feeds, furniture, and internet access that will comprise your currency “trading desk.” Don’t forget backups! Make sure you have a backup plan for everything just in case your main tools fail while you’re in a trade. What if your…
What is your daily pre-trading routine? Waking up doesn’t count. Having a pre-market routine is important. Don’t think you can just jump out of bed, plop in front of your computer, fire up your forex broker’s platform and start easily grabbing pips as if they were apples from a very short apple tree. What activities will you…
I want to make some money! Ahhh. Of course, anybody who’s interested in forex trading certainly has ambitions of raking in some dough. Trading involves risk, and we expect to be compensated for those risks. There’s no doubt that every currency trader expects to make a profit. The questions that you should ask yourself though are this:…
You need to seriously consider how much trading will affect your current lifestyle. How much time each day/week/month (whichever is most appropriate) can you dedicate to the various requirements of forex trading and managing a trading system? Your time availability should determine your trading style. The shorter the timeframe you are trading, the more time…
How are your personal finances? You need to determine if you can even afford to trade. Forex trading should only be done with risk capital. Risk capital is money that, if lost completely, would not have an overly harmful impact on you financially. Risk capital is money that you can lose. This is the kind of money that…
Why do you want to become a forex trader? Is it to become filthy rich? Is it for the thrill? Is it because you want to do something challenging and exciting? Is it because the girl you like trades currencies and you want to impress her? It is important to know what your…
The first step in building a trading plan is to realistically take a holistic view of yourself. The foundation of your trading plan starts with your self-reflection because you will be the only one using it. This self-reflection will reveal your trader profile, which is basically who you are as a trader. Who you are as…
What’s wrong with deviating from your forex trading plan if you make a profit anyway? Making an occasional winning trade, even when you throw your trading plan out the window, may provide a short-term pleasure, but entering trades haphazardly can adversely influence your ability to maintain discipline in the long term. Trading is a marathon, not a…
A trading plan will make trading simpler than it would be if you traded without one. Think of when you use a GPS device. (Or Google Maps on your smartphone.) You enter where you want to go. It then figures out where you currently are and then shows you how to get to where you…