There’s an old saying that goes, “If you fail to plan, you plan to fail”, this saying is perfectly applicable to traders who are hesitant to make a trading plan because it is time consuming or they just simply want to trade as if there’s no tomorrow.
This saying might sound superficial but if you are serious about becoming successful, you must strictly follow these words wholeheartedly especially when trading CFDs. If you ever ask a successful trader their secret to success, they will surely tell you two options to take – either you follow a trading plan or fail.
If you already have a trading plan, then you are on your way to success. But if you do not, you can check out these ideas that will help you throughout the process.
You must consider trading as a business. You have to treat it that way for you to succeed. Purchasing a charting program, reading some trading books, opening a brokerage account then starting to trade using your real money is actually not a trading plan – it is the recipe for disaster.
A reliable trading plan must be written with clear signals on it that must not be changeable as you trade. It should only be a subject to reevaluation every time the market closes. This trading plan can also change alongside various market conditions and can also be adjusted as the skill of the trader improves. A trading plan must be unique to every trader. It should be based on the trader’s personal goals and trading styles. If you use someone else’s trading plan, there’s a huge chance that you may fail to follow it because one trading plan is not suitable for all types of traders.
Are you really ready to trade? Were you able to test your system on paper trading? Are you confident to work in a live trading environment? Always remember this – trading in the Forex market is a give and take battle. Those real professional traders are prepared not just to take profit but for the losses that might come their way. They are ready to take the profit of those traders who lacks a concrete trading plan.
How are you feeling right now? Did you prepare for the challenges ahead? Are you emotionally and psychologically ready? Losses will eventually come your way if you have emotions like anger and greed or you are just preoccupied with other things, distracted with the tasks that you are supposed to do.
A lot of traders follow a particular mantra before they start the day. You must also create one to help you jumpstart your day. It is also important to have a trading zone that are free from all sorts of distractions.
Your trading portfolio must have a certain risk level in a single trade. This risk level is dependent on the trading style of CFDs that you follow as well as your risk tolerance. Although the amount of risk varies, the range is mostly around 1% to 5% of your overall portfolio on a particular trading day.