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Creating a Trading Plan

Forex Tips

By Nia on AirPublished 4 years ago 3 min read
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Always start with some form of strategy by defining your entry point, your exit points, and also strategizing your loss limit and target for the day. This is a good habit to practice due to the fact you don’t want to lose more money than expected. Be mindful of your margin as well.

The next part of your trading plan process is making sure you have a system that assists with managing your money specifically for your trading portfolio. Put a cap on the amount of money that you are willing to risk. Always, have a stop limit it is easy to want to past that stop limit but that is where your thought process of trading comes in a form of discipline. Setting up a limit for loss is very important to set boundaries for your trading plan. Always plan your profits and what you will invest back in and what you will walk away with as a profit.

One of the hardest lessons to learn about trading stocks in any market rather it is forex or the stock market is you need to parking lot your feelings. When you let your feelings get involved that is when you make irrational decisions which can cause you a lot of money that you may not have to lose. It is important to go into trading with a plan. Some try paper trading first before putting their actual assets into the market. This gives you a feel for the plan, learning the graphics, learning the market, and much more. However, if you are wanting to jump in, the biggest advice is to start small at about $100. If you lose learn from what caused you to buy in and lose money but do not give up and jump back out there and trade again.

Mistakes are the only way to learn. If you are on a winning strike make sure you stay humble and know when to walk away. It is very easy to be on top in forex and then it all goes downhill within a couple of minutes, knowing when to walk away and study the movement in the graphic is an important habit to form.

Previously, I talked about signals and that certain groups of forex MLMs or courses talk about signals. Now, I am not against signals in the beginning as a visual aide to understand what you are supposed to be doing during trades. Most importantly, you should not rely on signals fully, in my opinion.

Lastly, additionally a previous article Getting Started with Forex touched on the tools and how to get started with trading in the forex market. Later as we go on we will touch on technical analysis process and the tools that you can use to analysis your trades from previous volume. Setting yourself up for risk management is always important tool to practice. Again, by planning ahead of time your chance to fail is a smaller risk.

In Conclusion, a plan that is thought out before going into trading is important, utilizing stop loss during your trades save you from losing more than expected, and using the world news as a source but don’t let it be the reason for a specific trade. The news is to be aware but should not sway you from the actual graphic facts. Parking lot your emotions, emotions during trading can be a dangerous position to play on. Lastly, do not spread yourself more than you have to trade in your margin. Remember you are responsible for your portfolio.

*Disclaimer* All tips and suggestions are my own from personally experience. In no way, I am a professional financial advisor nor am I giving financial advice. If you have further questions please reach out to a licensed financial advisor or certified accountant.

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About the Creator

Nia on Air

Mental Health Survivor, Poetry Lover, Thought Speaker, Truth-Teller.

IG: @NiaOnAir_

Website: Niaonair.com

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