Famous author Brain Tracy said, “Every minute you spend in planning saves 10 minutes in execution; this gives you a 1,000 percent return on energy!” If you go in hiking without any compass or instruction, can you ever finish it? I know the answer will be a big ‘NO!’ Same goes for the business. No business can be successful without a plan. And asForex is a business, it deserves a proper plan too. Here are some tips about how to build a plan
- Evaluate your threats: It is very much essential for risk management and your strategy. According to threat tolerance, we can divide the Forex businessmen into two categories. They are –
- Risk Liberals are those who like to take the risk. They believe in the ‘No risk, no gain theory.’ But many Forex experts say this theory is bogus. Because when you take a massive risk, you have a chance to make a huge profit and loss at the same time. And many statistics show that 90% of Forex traders cannot succeed.
- Risk Averse are those who are unwilling to take any risk. They like to make a small profit out of a small investment. Their investments and profits are always small, and so are their losses. They believe in the ‘Little profit, little loss’ theory.
- Maintain your journal: Your journal is a record of your previous trades. This journal will include your entry-exit point, position size, ‘long’ position, ‘short’ position, results, and any other information that you need.
This journal will give you a clear view of your past and give you a lesson that will lead you to success. Visit this page and learn more about the disciplined approach to trading. Once you truly understand the importance of discipline, you will always trade with a journal.
- Identify market environment: The market environment is tough to predict. It can change now and then and take a wholly opposite look. So before making your plan identify the market environment.
There are many kinds of market trend goes on like – uptrend, downtrend, sideway-trend.