Excerpt from: Forex Tips
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| March 08, 2010 | | A trading plan is a must. I would be will to bet that virtually all successful traders have one. However, most new traders have no plan. In fact, I bet most new traders barely even have actual reasons for entering a trade. | |
Creating a trading plan is actually relatively easy. There are several core requirements that make up the plan. In my opinion, the main components of a trading plan are:
Trading objective (goals).
What and when to trade.
Money management.
The edge (trading strategy that puts the probabilities in your favor or a long sequence of trades).
Documentation and analysis of the results.
First, we have to define our trading objectives. Why are you trading? What is your end goal? Most new traders have completely unrealistic goals. For instance, a new trader might wan their $10,000 investment turn into $100,000 in their first year. While this is possible, it is highly improbable. These unrealistic expectations kill off a lot of traders before they ever had a chance. I think breaking even in the first year is an admirable goal; many traders do not do that. If a trader makes 20-30% on their initial investment in their first year, that is outstanding.
Full Story - Fx360
| Topic Tags: account, determine, edge, even, money, start, strategy, traders, trading | |
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