Writing a Plan

In there's no single method or formula that is used for trading the markets successfully. The market requires traders to learn & acquire the skills required to trade the market successfully. All traders need to learn and also understand how to analyze the market price movements. Traders then need to develop and come up with a trading plan for their trading activity - the trading plan will aim to come up with a wholesome way of how to combine the trading knowledge that traders have learned together with the trade strategies which they've learned in a structured format which will form the overall basis of their trading method. The Overall Trading Format will be written down to form what is known as the trading plan and this written trading plan is what the trader will use to interpret and analyze the market price moves. This trading plan can therefore be considered as a map or compass that the trader will be using when trading online.

By coming up with an effective plan your chances of becoming success will improve significantly. A plan will help you to effectively analyze the market and know when the best time to open a trade is and when it is best to close the trade.

Before starting to trade the you must be prepared with a plan. Just like in business where all successful businesses start with a biz plan & also successful traders must also start with a plan.

Sections of a Plan

XAUUSD Instrument

The first section of a plan will specify the xauusd that a trader will be trading. Traders should specify the gold that are best fitted for their trading method.

Before deciding the most suitable xauusd to trade a trader will have taken time to test their strategy on various xauusd on a demo practice after which they will choose & select the xauusd that produces most profitable results. The trader will then list this instrument on the plan as the xauusd that they trade.

Chart Time-Frame

The trader also will have to specify the timeframe they'll be using to transact with. For illustration a trader may find that the best time frame for their strategy is the 15 min time frame & hence they'll specify their time-frame as the 15 minute time frame.

The chart time frame which a gold trader chooses/selects will depend on which type of trader they are. For day traders who have a lot of time to watch the charts they can choose the five minutes or 15 minutes trading chart time frame and trade with these charts. For swing traders who do not have a lot of time to watch the market they can trade with the 1 hour chart time frame so that they can be able to follow the medium term trends that will last for a one or two days.

XAUUSD scalpers on the other hand can trade with the 1 minute chart time frame & trade the short term market moves. These traders will make many trade positions during the day and just like day traders they'll also have a lot of time during the day to watch the market moves.

Gold System

This section will specify the system that the online trader will be using to trade the trading market. This section will listing the trade rules which a gold trader will follow when opening a buy or sell trade. It also will listing the rule that a gold trader will follow when closing their trade positions - for example it will note the take profit levels & also stoploss order levels which a xauusd trader will set after they have opened a position.

Trader will write-down if they will be using an technical indicator based system to generate signals or the trader will write if they will be using support & resistance levels to open & close trades or any other technique that the online trader will be using for trading. For illustration a trader might specify that they will be using automated systems and they'll write the parameters of the automated robots on this section.

Prior to writing the trade system that a gold trader will be using, the online trader will have back tested this system on a demo practice account until the time that the system is producing profitable trades on a consistent basis and after coming up with a profitable trading system the trader will then write down the system on this section of their plan.

Mindset

This section will specify the mindset that you will be following when trading so that to ensure that you as a trader become successful when trading.

Discipline - This will list that you will be disciplined enough to follow the trading rules of your system and plan. Discipline will mean that you will be patient enough to wait for a trading signal from your system before opening a trade. This section will specify that you will only trade the trade signals which are generated by your system and you'll not second guess your trading system and open trade positions which aren't indicated by your system.

Trade Without Emotions - when it comes to trading the market you shouldn't let the emotions of fear and greediness control you when you are trading. You as a trader should always trade based on the written rule of your trading plan. Avoid becoming greedy and wanting more profit from the same trade instead of closing the trade at your take-profit level.

Gold Capital Management

A trader must specify their equity management rules that they will use when trading. For illustration a gold trader can specify that they will use a high risk:reward ratio which means they will place their take-profit level at two times what they have set as their stoploss order level amount. This in turn will make their strategy to be more profitable in the long run because using this method they stand to make more money from their winning trade positions & lose less money from their losing trade positions.

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