Every retail trader must have a balanced trading plan to make a profit from this market. Those who are new to the Forex trading business, often think they can make a huge profit by using some complicated trading strategy. They love to use the professional trading strategy which is on sale in the online market. Such an approach doesn’t work. Every trader has a different mindset which plays a crucial to their success.
You have to analyze your personality and define the trading strategy based on personality traits. This article is going to give you the perfect tips that the traders should use while developing a trading plan.
Analytical Approach
You have to find your trading style or preferred time frame before you start to develop a system. For instance, those who love to focus on a higher time frame must use long term or position trading strategies. On the other hand, those who love to trade the market in the lower period should go for scalping.
Once you have determined the suitable approach for your trading, you need to focus on that particular strategy.
Know Your Favorite Setups
To have a balanced trading strategy, you need to have some favorite setups. The professional traders at Saxo always execute trades based on some simple strategy. They consider those strategies as their favorite since the market behaves according to their speculations.
Being a new trader in Hong Kong, you should develop the ability to find your favorite setup in the trading platform. Forget the fact you are new to this market. Explore the details and find the connections to this market.
Focus on a Particular Market
Focusing on too many variables always increases the chance of losing money. If you want to become successful at trading, make sure you are not trading too many currency pairs. At the initial stage, trade only the major pairs. Your trading strategy should not include a cross pair trade execution method.
Keep the trading plan simple and you will be able to make a profit. If you intend to make a complex trading plan and focus on different markets, you are going to lose money like the majority of retail traders. Stay calm and find your favorite trading asset.
Know Your Average Holding Period
New traders never include the holding period of a particular trade to their plan. But this is crucial since it determines your success. Let’s say you have placed a trade and you don’t know how long you will hold onto that position. Such uncertainty usually forces retail traders to make huge losses in the Forex market.
When you focus on the creation of your trading plan, make sure you set the holding period for each trade. Though this will change, you still need to have a fixed number to make things easier.
Find Your Risk Tolerance Level
No one in this world likes to lose money. But in the Forex trading profession, you are bound to lose trades regularly. You can’t avoid losing trades by reading books and articles. No one in this world can secure 100% perfection in trading. But if you start to follow the money management rule, it won’t take much time to develop your skills.
Being a novice trader, forget the fact you are here to make some quick profit. Consider this as your business and try to improve your skills by reducing risk factors.
Revise Your Trading Plan
Make sure you revise your trading plan regularly. Those who have created the trading plan for the very first time should back the strategy in the demo account. If you manage to make a consistent profit in the demo account, you are good to go in the real market. If you fail to make a profit for a few months, you should bring some changes to your strategy or trading plan.
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