{"id":95674,"date":"2016-09-25T11:58:23","date_gmt":"2016-09-25T15:58:23","guid":{"rendered":"http:\/\/countingpips.com\/?p=95674"},"modified":"2016-09-23T11:58:45","modified_gmt":"2016-09-23T15:58:45","slug":"%e2%80%8b3-most-important-trading-plan-improvements","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/09\/%e2%80%8b3-most-important-trading-plan-improvements\/","title":{"rendered":"\u200b3 most important trading plan improvements"},"content":{"rendered":"
September 25, 2016<\/div>
\r\n<\/div><\/div>

By Admiral Markets<\/b><\/p>\n

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Dear Traders,<\/p>\n

A Forex trading plan is not really different from any other plan you can imagine.<\/p>\n

It’s basically a to-do list for trading Forex online.<\/p>\n

The main idea is to develop:<\/p>\n

    \n
  1. a set of rules you can implement and adhere to, then<\/li>\n
  2. your experience of applying them risk and cost free on a demo account<\/a>, until<\/li>\n
  3. feeling confident to start trading live<\/a>.<\/li>\n<\/ol>\n

    \"Free<\/a><\/p>\n

    But we have already covered
    \n    how to make a trading plan<\/a> – now we need to improve it.<\/p>

    \r\n
    \r\n

    Free Reports:<\/p><\/div>\r\n

    \r\n

    <\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

    \r\n
    \r\n
    \r\n

    <\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

    \r\n<\/div>\r\n

    \r\n
    <\/div>\n

    Afterall, if you are just randomly trading what you like without a real underlying system, method or planning:<\/p>\n

    …your long term odds of success are slim.<\/p>\n

    Trading a winning methodology creates your trading edge and vice versa.<\/p>\n

    And maintaining that winning methodology requires constant adaption, as the market changes over time.<\/p>\n

    So, let’s focus on improving your trading plan.<\/p>\n

    \"chart.png\"<\/p>\n

    Your Forex trading system<\/h2>\n

    First we need to know if your system actually needs improvement.<\/p>\n

    Begin by analysing your trade entries and trading time frame.<\/p>\n

    Is the time frame too low or high for you?<\/p>\n

    Remember that even strategies with lower than a 60% success ratio, can make you money.<\/p>\n

    How?<\/p>\n

    Well, let’s say you:<\/p>\n

      \n
    1. lost your first ten trades in a row and are now down 10%<\/li>\n
    2. win your next trade by 4%<\/li>\n
    3. win the next two – first 2%, then 4%.<\/li>\n<\/ol>\n

      This means you have made a total of 12% and are up 2% for that month.<\/p>\n

      You have now won 40% of your trades and are 2% up for a single month:<\/p>\n

      …which is what most banks give you after two years of savings.<\/p>\n

      The problem is that the majority of traders:<\/p>\n

        \n
      1. don’t last through those first five losses<\/li>\n
      2. abandon the trading system, to look for the next best thing in the market<\/li>\n
      3. repeat this mistake to the point where many quit trading entirely.<\/li>\n<\/ol>\n

        So what can you do about this negative scenario?<\/p>\n

        Here’s five things you can do that may improve your system right now.<\/p>\n

          \n
        1. Be patient.<\/li>\n
        2. Lower your risk by 0.5% to 1%.<\/li>\n
        3. Try to let your winners run.<\/li>\n
        4. Use a profit stop i.e. stop loss or take profit.<\/li>\n
        5. Scale in and out.<\/li>\n<\/ol>\n

          Money management<\/h2>\n

          When you have finished with your trading system, start focusing on your money management.<\/p>\n

          You need to be clear on whether or not your system allows you to trade multiple pairs and what those pairs are.<\/p>\n

          Improving your money management includes creating or revisiting your rule on what the optimal per-trade exposure is, for your trading system.<\/p>\n

          To calculate it, always take a potential double-exposure to a currency pair.<\/p>\n

          No matter if you are trading to make \/ lose 1,000 pips based on fundamentals or five pips based on technicals:<\/p>\n

          …as soon as you take a position, price can go up or down.<\/p>\n

          Even if your
          \nfundamental analysis<\/a> is right, it can move against you two pips or several hundred.<\/p>\n

          So what should you do?<\/p>\n

          Keep your position sizes small, so you don’t lose much money or for very long.<\/p>\n

          Control your trading emotions<\/h2>\n

          <\/p>\n

          Impulsive and emotional decisions are created in your mind.<\/p>\n

          Problems usually occur when a trader feels pressured to make a trading decision.<\/p>\n

          Staying calm and patient during trading, will help optimise your trading results.<\/p>\n

          Try to make a list that includes checking:<\/p>\n

            \n
          1. the optimal level of your emotional spiral<\/li>\n
          2. whether you are trading or gambling<\/li>\n
          3. if you are optimistic or euphoric<\/li>\n
          4. if your emotions are above the psychological support<\/li>\n
          5. if you are calm or nervous<\/li>\n
          6. whether or not you are committed to staying disciplined<\/li>\n<\/ol>\n

            Explore the latest trading innovations too, as there’s numerous
            \n            tools designed to optimise your trading experience<\/a> and make trading less stressful.<\/p>\n

            \"MT4<\/a><\/p>\n

            Get a reality check<\/h2>\n