Your Monthly Forex Trading Plan
If you are new to Forex trading, you may not know how to get started or how to make a plan of attack. Well, as somebody who has never traded before, or is still in the beginner stages, putting together a monthly Forex trading plan is essential to your success.
The fact of the matter is that trading Forex is not easy. This is indeed quite hard, and it takes a good deal of skill, patience, knowledge, and planning to be successful. Simply put, analysis, planning, and research are half the battle. If you can properly analyze the market and make a solid plan of attack based on your findings, things will go much better.
Sure, some of the most seasoned trading professionals may be able to just sit down in the morning and start trading. However, these are people that have plenty of experience. For everybody else, you first need to make a solid plan, or in other words, a monthly Forex trading plan.
You need to sit down for a few hours at the beginning of the month, maybe for a full morning, and really take your time analyzing the market. If you spend a few hours putting together a monthly Forex trading plan, things will be much easier. If you have a solid plan of attack, you won’t need to spend as much time each morning doing research before you begin your session.
For those of you who don’t know what goes into making a monthly Forex trading plan, no worries, because that is exactly what we are here for right now. Let’s get right to it and talk about the five most important components of your monthly Forex trading plan.
Analyze the Current Market Structure
The first aspect of your monthly trading plan is to analyze the current market structure. You need to identify multiple market factors including various support and resistance zones, trend lines, major pivot zones. Simply put, you need to see what the structure of the market is like.
Not only do you need to analyze market structure, but you also need to analyze the structure of the market of the previous month, and you then need to compare the two.
The past often dictates the future, so if you can find out what the current state of the market is like, it becomes much easier to put together a monthly Forex trading plan, as well as a weekly and daily plan.
Make A Plan for Daily Trading for Your Monthly Forex Trading Plan
For your monthly Forex trading plan, a good idea is to actually create a daily trading plan. Of course, a monthly plan is great for providing you with the big picture, but you also need a daily plan for every day of trading. Remember, the more planning and research you put into Forex trading, the more likely you are to be successful.
A big part of this is deciding which currency pairs you plan on trading with, and of course, the current market structure, as well as the following points below will help you determine this.
Moreover, this also means developing a solid trading strategy, one that either you have developed, or someone else’s strategy. As long as it is a proven strategy that takes care of how to enter trades, when to exit them, and where to set stop loss and take profit levels at, you should be fine. What’s your trading strategy?
Pay Attention to the Upcoming Week’s News
One of the most important things that you need to factor into your monthly Forex trading plan is fundamental news, and not just for the coming day, but for the coming week. In order to examine fundamental news, we recommend checking out the economic calendar on investing.com.
Here, you will see various news releases associated with specific national currencies, whether one star, two star, or three star news.
Three star news is often referred to as three bull news, and this is what you need to look out for. If you see that a currency, say the Euro, is slated for a three bull news release at 11 am, it means that you should not have any open trades with the Euro at that time. Also, don’t open any new trades with that currency for at least one to two hours after the news release.
Look for Patterns in the Previous Month
The next thing that you need to do in order to put together a comprehensive monthly Forex trading plan is to take a look at one day, four hour, and one hour timeframes, particularly for the previous month, or at least the previous week. Here, you are looking for patterns such as trends.
You want to look for patterns on all of the timeframes, and moreover, you want to see if there are patterns that are related across various timeframes. If you see patterns occurring across various timeframes, you can assume that they may continue into the future, and thus provide you with profitable trading opportunities.
Set Realistic & Attainable Goals for Your Monthly Forex Trading Plan
The final aspect of your monthly Forex trading plan is to set attainable goals for yourself. You can decide what your goals are for yourself, but just don’t set them too high. If you set unattainable goals, you will undoubtedly be disappointed and disheartened when you inevitably fail to achieve those unrealistic goals.
A Monthly Forex Trading Plan for Success – Conclusion
The bottom line is that something like a monthly Forex trading plan will increase your chances of success exponentially. If you take the time to do research, to analyze the market, and to find the best possible trading opportunities at the beginning of the month, your life as a Forex trader will become much easier.
As long as you incorporate all five of the factors we just discussed, your monthly Forex trading plan should be comprehensive and accurate enough to allow you to trade FX currency pairs with relative ease. Of course, this is not a fool proof plan, as you do need to know what you are doing.
We do realize that some of the components of this plan, such as analyzing trends, as well as support and resistance lines, takes a bit of know how.
If you don’t know how to do this, it is strongly recommended that you seek an education in Forex trading. One of the best sources to get a comprehensive education in Forex trading is the Income Mentor Box Day Trading Academy.