The Forex market is the largest financial market. This market is free from external manipulation and with the right skill you can easily secure your financial freedom. Many retail Aussie traders have changed their lives by participating in this investment business. Over the past years, many brokers have extended their help toretail traders. For instance, if you consider Saxo as your primary broker, you can easily make a huge profit and lead your dream life. But making a consistent profit requires a perfect trading plan. Without having a decent plan, you are most likely to lose money like the majority of traders.
So, how do we develop a perfect trading plan? Well, the answer greatly depends on you. However, you will get some amazing tips in this article and this will help you to craft the best-suited plan. Let’s learn the perfect way to create a robust trading plan.
Know your limits
You must know your limits before you start to trade the Forex market. You might be a rich businessman in Australia, but this doesn’t mean you will start risking a huge amount of money in each trade. Find your risk tolerance level so that you can lose money in trading without risking a big portion of the investment. The majority of the retail traders blow up the trading account since they become frustrated after losing a few trades. But if you trade the market with managed risk, you are not going to become emotionally frustrated. If you find it hard, follow the 1% rule of money management. And make sure you are not trading the market with money you can’t afford to lose.
Write down the trading strategy
To create a perfect plan, you need to write the details of the CFD trading strategy. By writing down the details of each trade, you will be able to find the best possible trades at the complex market conditions. Some of you might say, you know the details of this market and there is no reason to write things down. But have you seen a single trader, you have doesn’t have a written strategy. Before you craft the perfect plan, you must have written rules to trade the market.
Write down the trading plan
Once you have a perfect trading strategy, it’s not time to create a perfect plan. The strategy is just finding the entry and exit point for a certain trade. But a trading plan requires all the important aspects of the forex trading business. For instance, you need to determine the risk exposure factors in trading also. If you want to make a huge profit from this market, you should never trade with a big lot. Sadly, the new traders are always trading with big lots and losing their entire investment. To make a consistent profit, you should use the 2% money management rule.
Back test your trading plan
Having a robust trading plan is not enough. At times, you need to back up the trading plan. The Forex market is dynamic and you must push yourself to the edge to learn new things. If you stop learning the details of this market, it will take a huge amount of time to make a decent profit from this market. Being a fulltime trader, you have to think about the complex nature of this business. Try to find the best possible trades at the complex market conditions by using proper logic. If you fail to make a profit, back test your trading plan in the demo environment.
Keep yourself tuned
You might have the best trading plan but this doesn’t mean you will stop learning new things. Keep yourself in tune with the latest market news so that you can make the right decision at any time. Forget about an aggressive trading system and be prepared to accept the managed loss. Learn to think outside of the box as it will help you to improvise in real-life trading.