A Monthly Forex Trading Plan for Success
As a beginner trader, one of the worst things you could do is to jump right into the world of Forex without any sort of planning. You should always have something like a monthly Forex trading plan or a weekly plan for success.
Realistically, trading Forex is not easily done, with the vast majority of people who attempt it quitting after just a few months. It takes a lot of skill, knowledge, training, and practice in order to be successful and profitable in the world of Forex trading.
Even if you don’t have much experience or knowledge about FX, something like a monthly Forex trading plan can go a long way in helping you win trades. After all, trading is just a part of Forex. The first half of the battle is all about analysis, planning, strategy, and preparation.
If you manage to make a good monthly Forex trading plan, where all of your actions and possible trading opportunities are clearly mapped out, things become much easier. Simply put, Forex trading is the kind of thing that you want to do with a solid plan and strategy. This is not something that you can wing or just do on a whim. Waking up one morning and placing random trades is not the way to do it.
Remember folks, Forex trading is all about placing high quality trades that have been thought out. It’s not about just placing as many trades as possible and hoping that something sticks. Today, we’re going to go over the five major components of a good monthly Forex trading plan that will allow you to trade accurately, confidently, and profitably.
Identifying the Current Market Structure for Your Monthly Forex Trading Plan
The first aspect of your monthly Forex trading plan involves identifying the current market structure for the current month, and a lot of this is based on what happened in the previous month.
Here, you need to look out for support and resistance zones, trend lines, major pivot zones. These are all things that you need to take into account in order to put together a monthly Forex trading plan.
If you can identify price movements, action, and more, then you can create a coherent trading plan moving forward.
Being able to identify the market structure of the past month in relation to this month and this week, then the big picture starts to take form.
Creating a Daily Plan of Attack
The next aspect of your monthly Forex trading plan should be your plan of attack, or in other words, determining which Forex currency pairs that you are going to trade with.
Not only do you need to decide what currency pairs to focus on, which mind you should be one of the seven major pairings, but you also need to determine what sort of trading strategy you will use.
This means that you need to figure out what to do in terms entering trades, for exiting trades, as well as what your stop loss and take profit targets are. Hammering out a solid trading strategy that covers all of those aspects and is proven to produce profits is what you need to do here.
Keeping in Mind Weekly Fundamental News Releases
The third aspect of your monthly Forex trading plan should be the analysis of fundamental news. The fact of the matter is that the world economy is closely intertwined, and all sorts of news evens have major impact on currency values.
Therefore, in order to put to together a plan of attack, you need to know what the fundamental news releases for the next week are going to be. We recommend that you check out the economic calendar on investing.com.
If you see any currencies slated for a Three Bull News release, make sure to not have any open trades with that particular currency at the time when the news is set to release. You also don’t want to open trades with that particular currency for one to two hours after the news is released.
Taking the Previous Month’s Patterns into Account for Your Monthly Forex Trading Plan
In order to put together a coherent monthly Forex trading plan, the fourth thing that you need to do is to take into account market patterns from the previous month. This means that you should be looking at one day, four hour, and one hour timeframes.
First, look for patterns in the individual timeframes, and then see if those same patterns correlate across multiple timeframes. If you see patterns emerging, you have a good idea of what you can expect to happen in the next day, the next week, and the next month.
Setting Realistic Trading Goals
The final aspect of a solid monthly Forex trading plan should be your own goals. Remember, your goals need to be realistic and attainable. The only thing you will accomplish by setting unrealistic goals is disappointing yourself.
A Monthly Forex Trading Plan for Success – Conclusion
As you can see, something like a monthly Forex plan is not hard to put together. If you know what you are doing, those five components should come together and fit like a puzzle. This puzzle then forms the plan for your weekly and monthly trading for the upcoming days.
Now, beware that putting together a monthly Forex trading plan will take some time, maybe a few hours or a whole morning. However, the point here is that spending a few hours making a plan like this will save you some massive headaches in your future endeavors.
People, it pays to plan ahead, to perform analysis, and to strategize. If you do this properly, your chances of success increase exponentially. Now, with all of that being said, if you are a total newbie with no prior knowledge of Forex, then putting together a weekly plan may also be quite difficult.
If this is the case, we would recommend seeking a good education in Forex trading from something like the Income Mentor Box Day Trading Academy, the best place to learn everything there is to know about Forex trading.
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