A Monthly Forex Trading Plan for Success
If you are new to the world of Forex trading, something you may have never considered making is a monthly Forex trading plan. The simple fact is that trading FX currencies is not very easy. It takes a good deal of knowledge, skill, training, and practice to be truly successful in the world of Forex. One mistake that many newbies make is to just start trading without doing any homework.
Sure, if you do this, you might get lucky and win a few trades, but in the grand scheme of things, you will undoubtedly end up losing money. It’s always a good idea to make weekly and monthly Forex trading plans. The point here is that it is much easier to be successful and profitable trading Forex if you have a solid plan and strategy hammered out.
If you do all of the analysis and research first, and you make adequate preparations, trading becomes much easier. It’s like actually going to medical school first before you begin operating on someone’s brain, as opposed to learning neurosurgery while you’re already wrist deep in a human being’s brain.
If you make a monthly Forex trading plan at the beginning of the month, you end up having to do far less research and analysis before each daily trading sessions. This then means that you can focus more of your efforts on actually trading, rather than performing analysis. Today, we will teach you what the five main components of your monthly Forex trading plan need to be.
Identifying the Monthly Market Structure
The first aspect of your monthly Forex trading plan should involve identifying the current market structure, as well as the market structure of the past month. Some of the things to look out for in relation to the previous month include various support and resistance zones, trend lines, major pivot zones.
You also want to look for various price movements, action, and more. The point here is that the past often dictates the future, so if you can analyze the previous month in the world of Forex, it can provide you with a good indication of what will happen in the next month, or at least in the next week. You want to analyze the past to look for good current trading opportunities.
Making a Daily Trading Plan for Your Monthly Forex Trading Plan
In order to bring your monthly Forex trading plan to the next level, the second thing you should do is to put together a daily trading plan, particularly in relation to the specific currency pairs that you want to trade.
More than just determining which currency pairs are the best to trade on a given day or week, you also want to consider your trading strategy. Yes, this means that you need to be at least as little bit knowledge on the matter of Forex trading strategies and plans.
You need to determine a solid and coherent plan for entering trades, for exiting trades, as well as what your stop loss and take profit targets are. Having a solid trading plan or strategy hammered out right from the get go will allow you to trade much more confidently, and hopefully more profitably too.
Analyzing Fundamental Weekly News
One of the most important things that you need to do in order to put together a coherent monthly Forex trading plan is to analyze fundamental news for the upcoming week. To do this, we recommend that you go to the economic calendar section on investing.com.
Here, you will see news releases slated for the upcoming day and week. You will see one star, two star, and three star news. Most people refer to three star news as Three Bull News, and this is what you need to keep an eye out for. If there is a currency displaying a Three Bull News release, you need to be weary of it.
Let’s say that the CHF has a Three Bull News release schedule for 10 am. If this is the case, you don’t want to have any CHF trades open at 10 am, and you don’t want to open new positions with that currency for at least one hour after the news was released.
Identifying Patterns of the Previous Month
Something that you need to do in order to put together a coherent monthly Forex trading plan is to identify patterns that may have occurred throughout the previous month. Here, you should examine one day, four hour, and one hour timeframes.
Start with the larger timeframes to see if you can spot any patterns, and then do the same for the shorter timeframes. Finally, see if the patterns match up across those various timeframes. If you notice any big patterns, you then have a good idea of what and how to trade.
Setting Realistic Trading Goals for Your Monthly Forex Trading Plan
The final thing that you need to do here is to set realistic trading goals for yourself, profit levels that are achievable and attainable. Remember to not set the bar way too high, especially as a newbie, because at that point all you would be doing is setting yourself up for failure.
Making a Monthly Forex Trading Plan – Final Thoughts
As you can see, putting together a monthly Forex trading plan is not very hard at all. As long as you consider those five main components, and you put some time into it, you can make a solid plan that should get you through the month, hopefully with some winning trades.
Sure, it might take a few hours to put together a full monthly Forex trading plan, but that time invested is well worth it when you consider that it can help make you that much more successful and profitable. Now, for those of you that are truly new to the world of Forex, it might be wise to get a trading education.
We do recognize that putting together this monthly plan does take a bit of knowledge in regard to Forex, particularly when it comes to things like support and resistance, ranges, trends, and more. If you want to gain a basic education in Forex trading, looking into the Income Mentor Box Day Trading Academy is strongly recommended.