An operations plan can be simple or complex depending on how you want it to be, but most important of all, in the end, is that you have a plan and follow its rules.
With this said, these are some of the essential points that any Forex trading plan should have:
1. Trading system
This is the true essence of the operations plan. It should be your own trading system (More information: Example of a ridiculously simple trading system) that you have tried a lot and in which you have traded for at least two months on a demo account of an online broker.
Include all the necessary information about your system, such as: the time periods you use, entry and exit criteria, risk percentage, currency pairs to operate and the number of lots you work with, …
2. Routine of Operations
This is a crucial part of the trading plan because it will determine three very important things: when to analyze the market, when to open trades, and when you will evaluate your actions during the trading day.
3. Your perspective
Ask any experienced trader and they will tell you that one of the hardest things to do while trading is to let go of your emotions. This section of your trading plan will describe what state of mind you should be in depending on when you are trading currencies:
Example:
- I’ll see what the graphics actually say and not what I want them to say.
- No matter how misdirected an operation goes, I will make sure to only work with what my eyes see and not with what my feelings tell me.
- I will not try to get revenge on the market for losing money in a trade.
- I will not challenge myself if I lose a trade. Rather, I will take it as an experience and move on.
4 Your weaknesses.
Yes, we all have weaknesses, we just don’t like to talk about them. But ask yourself this: How can I go further if I don’t admit that I have to work and improve in certain areas? This section of the trading plan will be an objective way to keep track of everything you need to work on to become a better Forex trader.
Example:
- “I tend to open a lot of operations. Whenever I lose a position, I get angry and immediately try to get revenge on the market”
- “I tend to leave operations early out of fear”
- “I don’t always follow the rules of my system”
- “I do not follow my money management rules to the letter”
5. Your goals
“Make a lot of money” is not a good goal. Sit down for a few moments and think carefully about what you really want to achieve as a Forex trader. Do you want to dedicate yourself to this for life? How much investment do you really hope to recover from your operations based on your knowledge and experience? Your goals are not just about money. Maybe you would like to be more disciplined and gain more confidence in yourself. Goals are personal.
What do YOU want from this? Use these goals as motivation when times get tough. These goals will be your vision and you should always keep your eyes on them!
6. The operations log
This will be a great tool to help you become a better Forex trader. Make sure to record all your trades and the reason why you opened them. Later you will be able to see this and evaluate your operations and see how much progress you have made. I have seen my trading logs and have been able to realize how much I have really grown as a forex trader.
My first trades were very basic, now I have progressed, my trades make more sense to me now. I have gained a lot of confidence in myself as a trader and looking back on my operations, I have been able to really evaluate myself, correct mistakes and see that I am getting closer to meeting my goals.
This tool will help you tremendously in the long run, so take a few minutes out of each day to record your movements for the day. Although it may be tedious at first, in time you will be happy you did!
Probably wanna read:
- 10 Things you should know about Forex
- The five advantages of trading in Forex
- Is It Possible To Live by Forex Investing?
