TRADE PREPARATION
Give me six hours to chop down a tree and I will spend the first four sharpening the axe.
A B R A H A M L I N C O L N
01
JOURNAL YOUR TRADES
A journal is the single most valuable tool for any trader. Yet, most of us let it lapse or commit to one half[1]heartedly.
Journals provide an unbiased view of your trades, cutting through emotions and noise to show you exactly what happened. Used correctly, a trading journal helps currency traders identify risks and opportunities.
While there are thousands of templates out there, the best ones incorporate the following elements for each transaction:
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Entry time and price
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Exit time and price
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Position size
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Target price or indicator
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Stop price or indicator
02
DEVELOP A TRADING PLAN
A well-crafted trading plan is a roadmap to success.
Like any business plan, it defines key elements such as:
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Trading style
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Risk management
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Setups for your strategy
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Performance review milestones
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Markets you wish to trade
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Trading schedule
In this article, we discuss many of these in more detail. All of them need to align with your goals and expectations.
Otherwise, your strategy could deliver too much volatility or employ too little leverage.
03
CREATE AN ECONOMIC DATA RELEASE SCHEDULE
Economic data can and often do move currency markets as well as equities. Every currency trader should know when these are scheduled and plan for them.
These points inject increased volatility, creating both opportunities and risks.
Swing traders can use them as catalysts, while high-frequency traders may be better off avoiding them altogether.
04
PICK A TRADING STYLE THAT WORKS WITH YOUR LIFESTYLE
Imagine trying to day trade while holding down a full-time job. Other than checking your phone during meetings, chances are you won’t be successful in the long run.
Your trading style needs to match your lifestyle.
Take an honest assessment of how much time you can dedicate to trading daily, weekly, and monthly. Then develop a trading plan and strategy that matches.
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