- Janet V. Kee
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How To Make A Good Trading Plan
Forex trading is one of the sectors where the market can change significantly in a short period. It is one of the most popular markets in the world, especially in China. However, you need to be very careful because the market is very dynamic, even some said in a certain condition it could be a little wild. You could read more about this at http://www.forextradingchina.com/en/china/. That is why you need to have a good trading plan to anticipate the change in this super dynamic market and avoid being overwhelmed by the changes. You have to design in such a way that armed with this trading plan you will be able to remain calm even when faced with extreme changes in situations.
Pay attention to the details of your trading plan. Your trading plan should be as detailed as possible. The more detailed your trading plan is, the easier it will be for you to make decisions in forex trading. Pay attention to the flexibility of your trading plan. Even though we have compiled a trading plan in detail, it doesn’t mean that we have to run the trading plan rigidly. Discipline is necessary, but flexibility is also necessary. Being flexible is not the same as being undisciplined. On the other hand, discipline does not mean rigid. When it comes to running a trading plan, there are several things that you can make concessions on.
In such situations, it is okay if you close your position even though the risk has not been touched or the profit has not reached the target. But of course, this decision must be based on an objective forex technical analysis. Not only because of fear alone (psychological factors); for example, fear that the gains that have been gained will turn into losses. Another form of flexibility is to “increase” risk tolerance per transaction. Remember that we can only plan but we cannot control which direction the market will move. Risks may occur and losses may come your way at any time. Fortunately, the trading plan has guided what to do should the risk occur. As in the trading plan example above, the maximum risk is limited to 50% of the initial capital.