How to Write a Good Forex Plan - Written Example Forex Trading Plan Template
Forex trading plan checklist - the following is a template example of a forex trading plan template example:
JUSTIFICATION
1. TRADING IS A BUSINESS, SUCCESSFUL BUSINESSES ALWAYS HAVE PLANS
- Businesses that are successful always start with a plan.
- Successful business planning will guide you to success, think of forex trade plan as a map; it is a constant reminder of how you will consistently pull profits from the currency market.
- Difference between a successful trader and a losing forex one is the forex trade plan.
2. TO KEEP ME IN THE RIGHT DIRECTION
Consistency is important in your routine to measure how successful you are.
Keep you on target, read the forex trade plan every day and stick to its trading rules.
When it comes to your plan you should think of it as a map that shows you this is what you follow, it should have clear rules that specify when you open or close a transaction.
Your forex plan should cover all aspects of forex trading, you should read the forex trading plan every day until it is on your fingertips so that when you are transacting on the fast moving market of forex currency exchange you will always know what to do in every situation.
Your forex plan can be as simple or as complicated as you like, but the most important thing is that you have one. By having a one you have an advantage over the market, you will have better odds of making a profit than those who do not have one.
This forex trading plan checklist tutorial topic provides with an example forex trading plan template that you can use for creating your own forex trade. By now you have already written down the justification part of your forex trading plan template, If not get a pen and paper and write the justification part. Next we shall look at how to write the system.
Forex plan is one of the secrets that can help you to improve your profits. A good currency training guide like this one should show you how to come up with one using a forex trading plan template which you can use as an example to develop your own forex trade plan.
One of the most common question is, Is Forex profitable? one of the methods to make it profitable is to have a good plan.
IF YOU HAVE A GOOD BUSINESS PLAN AND YOU ARE DISCIPLINED ENOUGH TO STICK TO IT YOU WILL BE SUCCESSFUL.
GOALS OF THE TRADING SYSTEM
- Ability to IDENTIFY A TREND AS EARLY AS POSSIBLE .
- Ability to AVOID WHIPSAWS .
The forex trade system should find a compromise between the two Goals,
Find a way to identify a currency trend as early as possible but also find ways to help you distinguish the fake signals from the real ones.
FUNCTIONS OF EACH INDICATOR
MA - Identify a new trend as early as possible.
MACD - Identify a trend as early as possible.
Determine strength of a continuing trend.
RSI - Swing failure to confirm the start of a new forex trend.
Extra confirmation tools to help determine the strength of our forex trend.
Parabolic SAR - Help to ensure that we are not caught up on the wrong side of the trend.
Trend Lines - Signals a reversal when the line is broken
Price Action Signals - confirm the weakening of a trend.
Bollinger Bands - for price action study
To learn more about each indicator and how these indicators can be used to generate trading signal setups you can go to the Technical Indicators Section
CHART TIME FRAMES
- Main time frame is the 1H.
- Signals are generated on the 15 minute time frame.
15 Minutes Charts
- Trend Lines (Support & Resistance)
- 5 & 7 LWMA
- RSI (14)
- Bollinger Bands (20, 2)
RULES
LONG ENTRY
Entry
15 Minutes Charts
- Both MAs are moving UP
- MACD moving UP
- RSI > 50
- Parabolic SAR is below the price (Support)
When signal is generated on the 1 Hour Forex Chart, use the 15 minute forex chart time frame to open and close positions.
LONG EXIT
- RSI gives opposite signal
- Price breaks Support Trend Line
- Parabolic SAR is hit (Trailing Stop)
RULES
SHORT ENTRY
Entry
15 Minutes Charts
- Both MAs are moving DOWN
- MACD moving DOWN
- RSI < 50
- Parabolic SAR is above the price (Support)
When signal is generated on the 1 Hour Chart, use the 15 minute forex chart time frame to open and close trade positions.
SHORT EXIT
- RSI gives opposite signal
- Price action breaks Support Trend Line
- Parabolic SAR is hit (Trailing Stop)
ROUTINE
- Signals are generated using 1H forex chart time frame and executed using the 15 minute forex chart time frame.
- Trading signal to be executed immediately trading rules are met.
- Entry alert signals should be executed during daytime.
TIME OF DAY TO WATCH MARKET - MARKET HOURS
Watch market during daytime when most companies and online currency brokers are open for transactions. Use this to come up with a suitable program.
Example
Tips - You can use the MT4 Forex Platform Software to save this as a forex template that way you do not have to lay it afresh every time you open a new forex chart. If you want to learn how to save a forex trading plan template on the MetaTrader 4 forex platform, read: MetaTrader 4 Platform Tutorials.
FOREX MONEY MANAGEMENT
- Day trading - risk High return method
- Trade when I have a high risk to reward ratio 3:1 or more
- Stop loss = Parabolic SAR
- Set TP target 40-60 Pips
- Never transact beyond 3 % of account equity
- Never risk more than 2 % on a single forex trade transaction
FOREX MINDSET/PSYCHOLOGY
- Trade without Emotions (greed, fear, anticipation, impulse, bias, over-excitement)
- I trade what my eyes see not what I feel.
- I will be patient.
My job is not to be the trading system!
It is not to decide which signal looks promising.
That is the job of my forex system - which has a set of forex trading rules which tells me this is what I follow. Do not get caught up in price action and make rules as you go along.
MY JOB DESCRIPTION IS
To sit patiently and wait for my forex strategy to indicate that it is time to enter or it is time to exit. and then with great focus I execute the forex plan as outlined.
Taking trades not indicated by the forex system, second guessing it and not taking signals given, hesitating and getting in late, anticipating and getting in early are all common place and boil down to lack of faith in the plan and not having a burning focus on accurate execution.
GOAL: To have 100% undivided focus on mastering my ability to execute my Forex rules accurately.
The more you develop the ability to step back from price movement and watch the market dispassionately, waiting for a forex signal, the easier it will be to witness the fluctuations of your emotions without getting sucked into them allowing them to throw you off your game.
WEAKNESS
- I am greedy.
- I over-trade
- Make a list of all your weaknesses that are interfering with your trading. This is the first step to help you overcome these weaknesses. Use Forex psychology to help you overcome them.
NB: by writing down your weaknesses you will start recognizing them as you make progress, once you do this you will start to avoid this mistakes and your results will improve.
GOALS
- To focus on exit just as much as I do on entry signals.
- Always protect my account using stop loss, money management methods, follow with the forex trend direction and always following the trading rules of my forex trading strategy.
- Never second guess or go against my trading strategy. To always keep up my discipline.
- Follow all the rules of my Forex strategy and never break them.
- Transact fewer times and execute all my signals correctly. Trade what I see, what the system + currency charts are telling me.
- Sit patiently and wait for signals from my strategy.
- Achieve consistent forex trading results before opening a live forex trading account.
FOLLOW THIS FOREX SYSTEM
This is the most important part of creating the forex trading system.
Always follow the trading rules
Stick with the trading rules
Be disciplined and patient enough
FOREX Trading JOURNAL
Log all my trade transactions in a forex trading journal so as to track my training progress and improve my currency execution trading methods.
This forex trading strategy uses momentum to determine the trend of any forex currency pair.
Even if you are new to forex market and you do not know how a forex trading system looks like, this forex trading system template example illustrates to you how a Forex strategy should look like, the Forex tutorials explained in other sections of this training website will also explain further the different aspects that you need to learn.
Hence, the aim is to help you come up with your own complete forex trading strategy that is if you are looking for one, by showing you one that is already complete. In fact you can just use it as it is, or make a few adjustments so that it suits your forex trading style.
The aim is to help you improve your forex trading results by using a forex plan, and another advantage is that this forex trade plan will offer you a chance to improve your knowledge and it will help you improve your forex trading results and help you make pips when forex trading and keep them so that you do not keep giving them back to the forex market.
Read this forex trading plan training tutorial about developing a forex trade plan of your own, along with the learn forex trading courses and Forex trading strategies listed at the top of this learn forex tutorial website.
The Most Beneficial part of using this forex trading plan template is the "Money Management Part" you will learn how to trade currencies and minimize risk, which is the most important thing when it comes to trading the forex exchange market.
Forex Trading Plan Checklist - How to Develop a Trading Plan in Forex - Forex Trading Plan Example - Forex Trading Plan Doc
