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FOREX TRAINING

Create a Trading Battle Plan

Seven trading rules forex traders must live by

FOREX-TRAINING-Create-a-Trading-Battle-Plan

The topics of creating a trading plan are vast and range across a number of fundamental and technical principles - but a great starting point is to explore seven key rules that forex traders must stick to. These rules provide a great foundation for traders to go on and master the rest of the full Trading Battle Plan, which I developed as a forex educator.

Rule 1: Shield your capital from risks

Traders who are just at the start of their forex careers have the tendency to look at how much money they can gain from one particular trade. It’s this kamikaze mindset that leads to losing trades, which can occasionally cause a complete loss of capital within a trading account. In the midst of battle, soldiers never cease ground recklessly. Successful forex traders have exactly the same mindset. They protect their capital at all costs, calculating how they can minimise losses and maximise gains over a series of trades.  Always remember to protect your capital. Security parameters are always available for you to use when trading within your account.

Rule 2: Set up a stop loss at all times

This is an exceptionally important rule to follow. Within your trading account, it’s imperative that you create a stop loss to protect capital. I consider the stop loss as one of the most important items in a forex trader’s toolkit. A soldier wouldn’t go into battle without the necessary equipment. The same should apply to forex traders. They must not take a position in the markets without a stop loss. For those who aren’t familiar with the concept of a stop loss, it’s simply a way of identifying the maximum loss they are willing to make on a single position for a particular trade. My recommendation would be to place a stop loss between 0.1% to 3% below your original entry trade price (see figure A below).

FOREX TRAINING Create a Trading Battle Plan chart

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