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Thread: PLAN your trade and TRADE your plan

  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 10:10 PM.

  2. #11
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    Quote Originally Posted by pak forex View Post
    yes always make a plan and trade according to your plan. be determined and have patience in yourself. never ever go in against your plan such as doing over trading or being greedy etc. be focused.
    Action Plan should you place yourself and also can be played Climate Action Plan in every month after achieving some of the profit or loss because you increase the capital and pull some profits if the plan has achieved success in this month, and I do this method always

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  3. #12
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    yes we must have a good trading while do trade on real account in forex market and we should always make a good trading plan before start trading for that day because every day is new day and forex market always changing every day,so we must plan according to forex market condition every day..

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  4. #13
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    This is a great phrase. A traders entire job is to plan a trade and trade his pan efficiently. A traders job does not end by merely developing a good plan after analyzing the amrket. To stick to our plan and use it efficiently to earn profits we need to have discipline and emotional contorl

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  5. #14
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    Planning is one of the first task which every newbie must do before trading . No matter you are scalper, hedger, short term intra day trader, or long term trader, you have plan your trades. Otherwise , without planning , it becomes difficult to trade with one clear direction.

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  6. #15
    Trader techboy's Avatar
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    These are precisely correct statements but how many traders know all these things and apply it in there trading in a consistent basis, a lot of trades knows the basic but cannot apply in real time consistently because of bad psychology or bad mind set, not is wrong with all of these things but in order to be able to implement all these things in trading we must take care first of our psychology, it will be difficult to progress as a good trader if we cannot handle our emotions very well in all of our trading activities.

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  7. #16
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    But I always use my own way trading and I have invented my own successful trading strategies because I believe the best plan is the one is generated from within of yours.

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  8. #17
    Trader zintek's Avatar
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    I think you have tried to tell us about some techniques and their benefits. Anyway thank you for your composing. I think that "A-Class trades" is to basically hold out for a chance and when that chance comes going for that. This is also known as multiple dealing design.

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  9. #18
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    to find planing trade very dificult,so can you tell me what better we look for system trade for my self or we see planing from profesional trader?because with see sytem plan from profesional trader make enjoy trading.if you can give me file pdf about plan trading profitable i will very much thank you.

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  10. #19
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    It is certainly very important for a forex trader to have a plan that they normally use in their trading. But it is well known that having a good money management plan is far more important than any technical trading style or strategy

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  11. #20
    Registered user mohabbat's Avatar
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    Thank your brother. this is very good explain .and I think without planing any one can not gain on his life . so planing is not important only for FX but it is must essential for all situation of our life. and a prefect plan can change our life style .so we need to make a plan for our trading.

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