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How to Create a Trading Plan?


Jan 7, 2023
How to Create a Trading Plan?

A good and effective trading plan can completely transform the way you trade and have a significant impact on your results.

Taking inspiration from an already established trading plan can be a good starting point, but knowing how to create your own personalized system will take you to the next level.

There is no secret, practice is the best way to progress in trading and develop a trading system that will change your relationship to trading.

Admirals accompanies you in all these stages:

Free training offers in videos to start your trading experience and learn the basics

Demo trading account for risk-free practice with virtual money on the MetaTrader platform

Market analysis and live trading sessions every morning on Youtube to learn more

Trading offers with low fees to trade with a broker who stands with traders

Learn, train, keep improving and trade with Admirals.

What is a Trading Plan?

A forex trading plan is an outline of planned trading activity according to certain parameters. It’s like a to-do list for trading.

The main idea of ​​the trader’s guide is to develop a set of rules that he must follow in his trading in order to try to improve his results and reduce the risk of loss.

A well-made trading system should indeed allow the trader to reduce trading errors . This is also why practice is important in creating a guide, as it should reduce mistakes made in the past and improve results with little room for improvisation and mistakes due to emotion.

Once you have these rules written down it is much easier to apply them as there is a clear plan of action for how you go about your day to day trading.

How to Create a Trading Plan?

Scalping is a trading method that suggests taking positions very quickly over small units of time.

A scalper can take several positions in a few minutes, which requires great precision and responsiveness.

Thus, a trading plan for scalping must be very concise and very precise, so that the trader can trade quickly while sticking to his plan.

Day Trading

Day trading is also a mode of intraday trading, or in session, but the day trader generally opens fewer positionsduring the day, and his positions are held longer, up to several hours.

Being also a risky investment method, the trader must have a precise and clear plan, which can be easily and relatively quickly executed.

Swing Trading

Finally, swing trading is a less short-term approach to investing, with traders holding their positions Thus, the swing trader generally has more time to analyze the market in depth and take into account more parameters.

His trading plan must therefore be more complete and prepare for all the eventualities that the trader may encounter while his trade remains open for a long time.

Determine Which Markets to Trade

Traders can decide to invest in a large number of markets. At Admirals, you can trade through the Trade.MT5 account on the following markets and instruments :

The choice of market and instruments can be dictated by several factors, including the trading style adopted and the strategy, but also other elements such as volatility, spread and trading hours .

Find your Trading Strategy

Any successful trader necessarily has a good trading strategy. There is no point trying to establish a trading plan if you do not know which strategy to rely on and on which graphic bases, technical analysis and fundamental analysis you are going to build your trading.

The plan you are about to build should clearly explain under what conditions you should enter the market, and under what conditions you should exit. This is the basis of a trading strategy.

For example, your guide must help you confirm or not a trading signal , with for example aggressive or more conservative approaches:

An aggressive approach can for example confirm a trade as soon as support or resistance breaks. The risk being that the market reverses quickly after a false break and leads to a loss.

A more conservative approach would, for example, push the trader to wait for a candle close or a pullback before entering the market. This lowers the risk but can cause the trader to miss the most powerful and fast moves.

There are plenty of trading strategies that can be built around chart analysis or certain technical indicators such as Moving Averages, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Fibonacci retracements, Points Pivots or Ichimoku and many others.

Open a free demo trading account now to test trading types, markets and instruments, and risk-free trading strategies with virtual money.

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