Every trader needs to have a trading plan. Below is my trading plan. You can use it as a reference to create your own.

The trading plan describes how I will trade Forex in three parts:

Mindset

What is your trading goal?

Make a 10% profit on my account by the end of 2019 using the strategy detailed below.

How will you achieve this goal?

Every Sunday and workday at the New York close I will check for setups and place orders on my account. This will be at 23h00 CET. I will also document all trades in my trading journal. By 24h00 I must be done and go to bed. During the day I will only check my trades or charts at 7h00, 11h00, 15h00, 19h00 for 5 minutes max and then again at 23h00 for the daily New York close.

I will also practice the trading strategy on Tradingview by backtesting all pairs from 5 years back or at least 100 trades per pairs.

What are your biggest weaknesses?

Fiddling with trades and overtrading. In general not being consistent enough. Stopping after a losing streak. Trading recklessly after winning streak.

How will you overcome your weaknesses?


What is your daily trading routine?

At 23h00 I will:

Strategy

Which currency pairs will I trade?

EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD, USDCHF, Gold and Silver


What time frames will I trade?

Daily. I will look at 4hr TF only to get a better picture of the price action. I will not trade on setups on the 4hr TF that form during the day.


What are my entry requirements?

Reversal after Indecision on S&R zone

A potential setup forms when there is indecision forming on a S&R zone.

This should mean that momentum is slowing down or has slowed down.

I will trade a possible reversal of the S&R zone.

I can enter at a 50% retracement of a rejection candle or at the break of the candles recent high (bullish) or low (bearish).

If the indecision candle is a pin bar/rejection candle with a long wick I can also use a 50% retracement entry, if not I will trade the break lower or higher.

A reversal can be a counter-trend trade in which case price needs to be far away enough from the 21 SMA. It can also be a with trend continuation trade in which case the price should be not too far away from the 21 SMA. If the market is going sideways and the 21 SMA is more or less flat, I will not set up the trade into two parts. Potential take profit must be about 2R before hitting the 21 SMA.

Reversal after engulfing pattern on S&R zone

As per the method described in the Candlestick Trading Bible.

Continuation after Indecision in trend

As per the method described in the Candlestick Trading Bible.


What are my exit requirements? 

Set and forget for target one

Orders will take me out of the trade.

I will place a take profit order and a stop-loss order that will take me out of the market either with a loss of a profit.

Managed second target

If a set and forget trade has been on for three or more candles and price reverses past the last formed anchor candle, then I will close the trade for a smaller than planned profit or loss as the trade will have a high probability of going against me.

If the trade hit the first target, then half of my position will be closed out automatically. For the other still open half I will move the stop to breakeven. The initial target of 2R will be removed (if it also hasn’t been hit already) or will be moved further out to next S&R area. I will trail the stop at the high of the latest anchor candle.

Stops

I will place stops behind at least two barriers. For example, a support and resistance zone plus a previous high or low that once passed will invalidate the setup.

Take profit

I will place a take profit order at 1 or 2R or right before the next support and resistance zone at a distance that is minimal 2 times the distance of the entry to the stop-loss order.

Example


When will I decide not to enter trades?

Risk Management

What is your account type and size (and any other relevant info)?

Micro account, 1:30 leverage, minimum forex trade size 1000 at Etoro because they have reasonable spreads, are regulated and offer negative balance protection in my jurisdiction. Also, their platform offers copy trading, which makes it possible to share my trades. I combine Forex trading with a investment portfolio in the same account.


What is your risk profile?

Low risk


What is your risk per trade as a percentage? 

1 - 2% per trade or I will trade the smallest possible lot size if this means that the risk is still less than or equal to 3%.

What is your maximum drawdown before you stop and reassess?

20%

Will you have more than one trade open at a time?

Yes


If “yes” to above, what is your maximum risk exposure at any one time?

6%