How to build a forex day trading plan?

All businesses have a plan that they follow at all times.Forex Currency Day Trading is no different than any other traditional business. Like all successful businesses there it must have a proper business plan in place.

First a trader must pick out a pattern or two that they will be trading. There are tons of patterns out there and it is not easy to learn all of them. A trader must only focus on one or two patterns and try to get very good at them. Next on the list will be the market that the trader will choose to trade. There are so many electronic markets available there today. A trader must pick one or two out so they can pay attention to them more closely and follow its every move.

Next on the list will be the amount of capital that the trader is willing to risk in any market. They must be willing to accept the fact that they could lose all their money and it will not affect their lifestyle in any way. Next on the list should be rules that a trader will follow while entering, managing and exiting the trades. Exits are far more important than the entries as anyone can enter the market, exits is what separates a winner from a loser. A daily loss limit to stop trading is a good thing to have on the list too.

A trader must keep a record all trades he or she takes to keep track of their performance. They must also include in their plans the days such as holidays and life events that they will not be trading. This is very important as trading is a mental game by nature and it is very important for a trader to be in a top mental shape at all times.

Any distractions in a trader's mind in the form of common events such as a fight with a spouse, divorce,and mounting bills etc. are enemies of the mind and must be avoided at all costs by a trader while trading. Traders must also include in their plan a way to practice on their market after the regular close and not just on a live market. This way they keep themselves mentally focused while trading in a live environment. They can also include in their plans on when it is fine to reward themselves and in what way. They must also include some plans to take time off when the market can get too overwhelming for them.

A trader must keep this plan on the trading desk or where easily visible and follow it whenever they trade. The Trading Plan is the most important document a trader will ever have in their trading journey. They can add more items to the plan in the future and make sure that they follow their plan at all times. Success will naturally follow a well planned and executed trading plan.