Making a Monthly Forex Trading Plan
If you are new to Forex trading, something that you absolutely want to do is to make a monthly Forex trading plan. People, the fact of the matter is that trading Forex is not easy, not in the least. It takes a lot of skill, knowledge, and dedication, as well as precise planning.
You cannot just wake up one morning and start trading random FX currency pairs in a random manner. If you want to be successful in the world of currency trading, you need to put the work into it. This means analyzing the market structure, paying attention to news releases, having a solid trading strategy, and more.
Without these components, your chances of being a successful FX currency trader are very bad. This is why you want to make a monthly Forex trading plan, so you can perform accurate market analysis and to hammer out your plan of attack.
If you manage to follow the five tips as outlined below, and to incorporate all of those aspects into your monthly plan, your chances of being a profitable FX trader increase exponentially. Let’s get to it and talk about the five components that you need to incorporate into your monthly Forex trading plan.
Making a Monthly Forex Trading Plan
Below we have compiled a list of the five main components that you need to factor into or pay attention to when making your monthly Forex trading plan. Each one is just as important as the last, so don’t forget about any of them.
Identify the Monthly Market Structure
In order to create a monthly Forex trading plan, the first thing that you need to do is to identify the market structure within the given month. You should try to identify various market factors including various support and resistance zones, trend lines, major pivot zones.
You want to look at the whole month, so don’t be afraid to look at daily, weekly, and monthly timeframes. If you can identify various price movements, action, and more, you can then make a plan for moving forward.
Remember, what happened in the past often indicates what will happen in the near future. So, if you can identify the market structure, both past and current, then you can start putting together a coherent monthly Forex trading plan. Simply put, you are looking for possible trading opportunities.
Create a Daily Trading Plan
The second aspect of your monthly Forex trading plan should actually be a daily trading plan. This means that you should try identify which Forex currency pairs that you want to trade with.
Moreover, this also means that you should be putting together a solid trading strategy, something that has been proven to provide positive results, or in other words, a strategy that has shown itself to be profitable.
This means that you should try to determine solid methods for entering trades, for exiting trades, as well as what your stop loss and take profit targets are.
In other words, for your monthly Forex trading plan, you need to set goals, realistic goals, not absurd goals, and you therefore need to hammer out a solid trading strategy that will help you achieve those reasonable goals.
Weekly Fundamental News
Another thing that you need to pay attention to when putting together a monthly Forex trading plan is fundamental news for the upcoming week. Events around the world, whether economic, political, ecological, or anywhere in between, all have their impacts on fiat currencies.
Therefore, what you should be doing is going to ivesting.com and checking the economic calendar. What you are looking for are three bull news releases for the upcoming day and week.
If you see that a particular currency is displaying a Three Bull News release for a specific time, you want to make sure that you don’t have any trades open with that particular currency at the time of the news release.
You also want that news to consolidate with the market, which means that you should not open new trades with Three Bull News currencies until one to two hours after the news release.
What Happened in the Previous Month?
Something else you should do when creating your monthly Forex trading plan is to take a look at the previous month to see if you can find any patterns in relation to currency prices. Here, you should be looking at one day, four hour, and one hour timeframes.
You want to see if there are any short term patterns, if there are long term patterns, and if by chance those short term and long term patterns form one larger patter over a longer period of time. If you can spot big trends and patterns, you can then devise a trading strategy to trade certain currency pairs based on future predictions.
Setting Realistic Goals
The other thing that you need to do for your monthly Forex trading plan is to set realistic goals. This means setting goals that you can actually achieve, ones that you have seen others achieve in the past. If you set unrealistic goals, the only thing you are doing is setting yourself up for failure.
Your Monthly Forex Trading Plan – Final Thoughts
If you follow the tips we have outlined today, and you incorporate all five of those factors into your monthly trading plan, then you should see your rate of success and your profits increase substantially.
We really cannot stress hard enough how essential it is to create a monthly Forex trading plan. If you hammer out all of the details and are prepared for any eventually, making profits becomes much easier.
All of that being said, if you want to be the best traders that you can be, we strongly urge you to seek an education. The bottom line is that if you learn all of the Forex trading basics and fundamentals first, being profitable becomes that much easier. Remember, a solid education and knowing exactly what you are doing is half the battle.