Friday, September 4, 2009

Understanding ‘Plan Your Trade, Trade Your Plan’

You may have already heard the FOREX saying of ‘Plan Your Trade & Trade Your Plan’. Yes it does sound direct & literal, still for folks new to FOREX, the above saying is still vague. Now let me share with you my understanding of the saying ‘Plan Your Trade & Trade Your Plan’. What is your plan? Firstly, you must have a profitable trading system, strategy, or plan; however you want to call it. You don’t have a trading system yet? Well then you may want to make a FOREX trading system. FOREX professionals recommend that you test your trading system with at least 12 sequential months of trading data.

Having a well tested profitable trading system is already halfway to understanding the saying ‘Plan Your Trade & Trade Your Plan’. The other half is sticking to your system no matter what happens to your trade purchases. For example, perhaps the price suddenly spikes 200 pips to your benefit. How do you handle it with your trading system? Does your system close the trade & take the profits immediately? Perhaps your system gives the price some more room in case it moves towards more profits. Whichever is like your system, a disciplined trader shall not deviate from the trading system. Happy Trading!

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