FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
ETX Capital information and reviews
ETX Capital
FxPro information and reviews
OctaFX information and reviews

Trading Like A CFO - Planning

We already went over the similarities between trading and financial management. Now we are going to get a little deeper into each one of the elements of management that could help with your trading.

Planning to succeed

Having a plan is a vital aspect of encountering any endeavor. Flying by the seat of your pants might work for simple tasks, but the more complex the thing you are about to do, the more necessary it is to have a plan. And by this point, you already know that forex trading is quite complex, so you definitely need a good plan.

There is a saying that if you fail to plan, you plan to fail. Same applies to financial markets. Here are some guidelines to help you with your plan.

A good plan is ultimately personalized to you: this isn’t something that you can conveniently download from the internet. Many factors go into a successful trading plan, including your available time, psychology, interests, and objectives. The best plan is the one that suits you.

Which means that your plan is going to require rehearsal: no plan is perfect from the beginning. This is what demo accounts are for. Try different techniques, strategies, backtest and research. All of this will you refine what works best for you.

Write it down: a lot of traders skip this step but writing things down help solidify then in our minds and help us stick to them. Consider having a one-page summary you can have handy to refer to it.

For your plan to work, you will need to be disciplined in applying it. This is another reason to have it printed out and easy to reference; when you are feeling doubtful or unsure, referring to your plan might help you stay on track. There’s no point in having a plan you don’t stick to.

Trading plan vs. trading strategy or system

A trading strategy is a set of rules you set up to determine when and how you will enter and exit the market. A trading plan is how you are going to approach your trading, including how much you will fund your account, what strategies you use and how you will manage money. You can have several trading strategies within your trading plan; for example, an approach to trade USDJPY, a different strategy to trade precious metals, another to trade GBP crosses, etc.

The market is ever-changing, and you are going to be continually improving your trading, which means you are likely to be using different strategies, trading them out for better ones. Your trading plan, however, remains the same throughout.

Some things your trading plan should have

Guidelines: What are your core objectives in trading: making X amount of pips? Having X% of trades end up positive? A combination of both?

Routine: An excellent way to keep to your plan, and maintain predictability is if your plan follows a specific routine: Start trading a particular time, for example. Or a certain number of trades. Check the markets at specified intervals.

A checklist: Your plan should specify certain requirements to be met for trading; you shouldn’t be just jumping into the markets at any opportunity. For example, before trading, make sure you have your setup in order, check the markets, check the latest news, review the economic calendar, and so on. A visual checklist – again, hopefully written down – allows you to make sure you are sticking to your plan and your market position is optimal at all times.

If there is one thing you get from this article, it should be that you really should write down your trading plan and strategy. Not just because it will be useful later, but often only the mere writing it down will help you see parts of your plan that need to be worked on a little more.



Telcoin: The Future of the Dark Horse of Cryptos

The cryptocurrency world famously has its ups and downs, and May 19 was not a good day. However, investors remain optimistic. Most cryptocurrencies already bounced...

DeFi Vs CeFi: The Battle For The Future Of Finance

The term DeFi is quickly gaining popularity, but not everyone understands what the emerging technology is, how it works, or how it compares to centralized finance, aka CeFi...

Guide: How To Make Money With Bitcoin In 2021

Bitcoin has been making headlines for over a year, smashing record after record and setting a new all-time high over $60,000. The coin, which rose from virtually worthless...

Dealing With Volatility: What Is VIX Index?

Volatility is a great factor when it comes to trading and the market. Hence, market indicators were developed to help traders quantify the volatility expectations of the market...

How to Invest in Facebook Stock with Libertex

Facebook is now a popular social media platform all over the world. Aside from that, Facebook, Inc. (NASDAQ: FB) is now one of the biggest companies...

AvaTrade: Commodities trading explained

Commodities are basic items of consumption of the worldwide economy. Do you have an opinion on the price movements of Gold, Silver or Coffee? Act on it! Commodities...

Editors' Picks

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.