The trading plan will be a complete set of rules which will have a great impact on your trading procedure on the micro level day in – day out. This shouldn’t be mistaken for a business plan, rather, a specific rules and details of the actual trading process and activity. A disciplined trade plan will help you follow a strict trading procedure, helping you control emotions and keeping your disciplined trading routine.
Feel free to read everything in our James Edwards complete currency trading system overview.
As you know, you cannot control the market or other traders or the results of trades. The only thing you ARE able to control is yourself. So as long as you stick to the trading plan and react and act in your best interest, keeping emotions aside, you will be able to trade with the system and profit.
The essence of the forex system:
- Creates boundaries and rules to protect you from mistakes
- Keeps you operating within the parameters for success
- Make trading simpler and easier
- Limits the possibility of making very costly errors
- Prevents emotional and psychological issues, effecting your trading
Example of a Forex Trading Plan
James always starts his trading routing 30 minutes before he actually starts trading. This helps him prepare all the equipment and make sure everything is working properly. His laptop is always on – just in case his desktop computer encounters any problems.
Here is his trading software setup:
- Sessions: On
- Session Start: 1000 (this is equivalent of the London open by our server time zone)
- Session End: 2359
- Reference Line: 30
- PIPS Time Frame: M1
- PIPS Look Back: 10
- TICKS Time Frame: M1
- TICKS Look Back: 10
- P1 Signals: On
- P2 Signals: On
- P3 Signals: On
- P4 Signals: On
- T1 Time Frame: M1
- T1 Look Back: 10
- T1 Reference Line: 30
- T2 Time Frame: M1
- T2 Look Back: 60
- T2 Reference Line: 30
Always make sure you check and make not of any high impact news releases. Double check if it is a national bank holiday in any of the financial centres, if so, don’t trade at all (UK,US). Then conduct a quick analysis of the current state of each currency and anticipate which ones are likely to trigger signals.
Market Trading Hours (Actual Trading Session)
Trading takes place every monday-friday, the only exception being national/bank holidays for US and the UK. Any other major holiday in other financial cetres will still be traded, as those tend to have much less impact on the market.
Only open new trades between the London morning session (08:00-11:00 GMT) and then during the New York morning session (13:00 – 16:00 GMT).
No new trades should be opened between or outside those sessions – exception being any existing open trades.
Monitor just the 8 major currencies: USD, EUR,NZD, JPY, GBP, CHF, CAD, AUD – be prepared to open new trades on any of the 28 currency pairs made up from these 8 currencies.
Have all the 28 pairs open within your platform (on 6 screens). Each chart is open in the 5 minute time frame and no other indicators should be open except CCT_ATR_Stop indicator and CCT_ATR_EA.
Entry to the trade
Enter a new trade when a valid entry is signaled by the Complete currency trader software, following the rules:
- You currently don’t have a trade open in that currency
- Don’t take your account used margin over 50%
- Trade is within the time frames discussed before
Stop Loss Strategy
The stop loss will be set according to the CCT_ATR_Stop indicator, which will be using the ATR dat as each price bar closes. CCT_AT_EA will manage all of this automatically.
Make sure your risk per trade is never more than 1% of your account balance. The position size will vary and will be dependent on the PIP distance of the first stop loss.
All the open trader should be monitored and managed using the CCT_ATR_EA tool. Always monitor the trades manually and ensure the EA is working correctly. If the open trades remain open, they should be managed as normal, even if they go beyond the set sessions.
General rules for trading
- Stop trading at the moment you break any of the rules
- Your Capital should remain safe at all costs
- Never go without using stop loss
- Cut your losses early on
- Allow your profits to go on
- Never ever double up or average down
- Don’t scale out of trades
- Every opened trade should be monitered
- Any opened trade should be closed at minimum 5 minutes before the high impact scheduled news
- Don’t open trades 30 minutes before or 10 minutes after a high impact scheduled news
- Discipline and patience are your friends
- Follow the rules at any given time