PLAN your trade and TRADE your plan
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  1. #1
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    PLAN your trade and TRADE your plan

    Hi, everybody.

    How many times we've been telling this phrase to ourselves? Why really small amount of traders have a trading plan and able to follow it?

    First, let's define what trading plan is.

    It is set of rules that describe your entry, exit and position management technique.

    It's important to distinguish mechanical trading system and discretionary trading plan.

    Mechanical trading system describes setups in very detailed mode, often it looks like "buy when MACD crosses it's medium line after sequence of 3 white candles closing at upper 75% of their range". This detaliization at the first sight simplifies work of a trader, but it offers less flexibility, you can't just adapt your trading system to recent changes in market activity - you should design a new one.

    Trading plan can be less rigid in describing your actions. For example: "Buy after pullback, when price breaks out from the trading range and we've seen signs of big money accumulating before". This describition does not stick your attention to bars, candles or color of indicators. You can be more flexible with your decisions, yet you know the price action you want to capture.

    How to know what plan to trade?

    First of all, it's useful to analyse - what trades can be done over there?:


    1. Breakout momentum trading.

    2. Trading pullbacks on stair-stepping trend

    3. Fading breakouts

    4. Trading sideways market


    There are other trading styles but basically every trade is a variation of one of those trades described above. To be able to consistently follow your trading plan, you should decide - is your trading style for you?

    Every style is absolutely not easy, and your should find that frustration you can live with.


    1. Breakout momentum trading.


    If you like fast markets and don't want to "nurse" bad trades, probably this is for you.
    Your profits will be relatively small (you will take only 20-30% of the whole trend, oh my God).

    Drawback of this style - leaving some money on the table, benefit - perfect timing of the trade. In most cases you will know pretty fast whether you have winning trade or not. Also, in most cases you can at least cover your risk when you are wrong.

    To trade this way, you should have a lot of patience and ability to pull the trigger when moment comes.



    2. Trading pullbacks on stair-stepping trend


    The obvious benefit of this trading style - maximized profit because you get good, often best prices that market can provide. Best winning trades can look very attractive - bought low, sold high.

    Drawback - you go against the market, you can be wrong about how deep correction is or is it a correction at all. You should be ready for some frustrating situations when market takes your stop and finally goes in your favor.
    For example in momentum breakout trading you can close your bad trades to breakeven in 80% cases. When you try to trade pullback, you may be stopped out quickly and several times in a row.



    3. Fading breakouts


    Same drawbacks and benefits like in pullbacks trading. You go against the market, you may be wrong very quickly but you can get very quick nice profits. Also you should have very good timing for your trades.



    4. Trading sideways market


    Sideways markets are often dull enough, but some traders like this slow tempo.

    Benefits: you can have enough time to enter a trade, you might not sit neat the monitor, most of the time you can use limit orders in "set and forget" mode.

    Drawbacks are wide stops, slow tempo (you don't know whether you are right ot not quickly).


    So, you should decide what trading style matches your personality.

    Of course, there can be sort of combination of one and another, but think about your "A-class trades". What do you expect it to be?


    Good luck!

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    Last edited by Value trader; 08-07-2013 at 09:10 PM.

  2. #2
    Registered user dkarev's Avatar
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    i totally agree with all the point inhere and the thread starter has really done a good job inhere but i guess traders get carried way from their trading plan due to the profit or loss they might make when trading,some trader feel getting back what they might lost in short time will help them but they end up losing that trade and still going out of their trading plan and circle

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  3. #3
    Rookie mohamed reda's Avatar
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    that is 100 % true also the time of trading is so necessary thing to make more profits .the London session may be the best time to trade to improve your daily profits and you must have an entry point and an exit point to know when yo must open a trade or when you must exit your trades.so that you are right.

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  4. #4
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    I agree with these point in the trading the planing is the key point in the trading and i think we need to have the good planning in the trading to make the good profit in the trading and i think the planning is the key because the forex trading is uncertain business and you will need to have the planning to control the uncertain of the market.

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  5. #5
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    I am agree with your all points sir planning, discipline, hard work, skill is also necessary here to become a success full trader all we know that planning is a universal process and its everywhere if you are doing any business you should have a great planning for your future because that will be a big safety for you regarding future losses

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  6. #6
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    Every trader in the Forex market to develop a plan trading in the beginning because it is considered the most important thing before starting trading because the forex market is like any Business last needs to plan and needs to be trading method in order to verify its success is not a market as easy as it is believed some of the novices in the beginning

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  7. #7
    Registered user zintek's Avatar
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    Okey, I would like to understand this saying "Plan your trade" it indicates what we are expected going to do if we experience a particular situation during our deals like big a cure for pattern, edge contact, reduction relationship, etc. If our strategy or business it will help restrict our dealing errors and reduce failures it also eliminates any bad creating decisions in the womb of when. "Trade your plan" once we have our software system we have to apply it and it indicates we have to adhere to our software system our own guidelines regardless of what occurred once we have met a particular situation in our dealing.

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    My opinion plan for success
    I not trade frequency because when I trade frequency I loss too much that why ?
    because when I loss too much I fear loss more then i close order and it rise up and bad healthy when use long time on computer
    I think long term trade is a very best and Important is moneymanagement I think no one win all times If we have rule i think we can earn money form forex

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  9. #9
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    i absolutely consent with all the stage inhere and also the thread basic provides really performed a superb task inhere nevertheless i guess traders receive carried technique from other dealing plan due to the earnings or even decline they could make when dealing, a number of trader feel getting back exactly what they could dropped in short time period can help them they wind up sacrificing of which business nevertheless going out of their own dealing plan and also group

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  10. #10
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    Plan your trade and trade your plan. This is very difficult for many traders. So do I. Trading discipline is important for trader. But in fact, this is very difficult to carry out the plan. For example, we have S/R trading strategy. When price reaching the line, will we make transaction? Or will we not afraid to cut our loss? My opinion is we have to practice more and more our psychology to trade our plan well.

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