How to Have Rules in a Stock, Futures or Forex Trading Plan

Once you start trading the stock or forex markets you need to stick with a trading plan and a set of rules to trade by. You need to stick with your plan and the rewards will follow in profitable trades. To make consistence profitable trades you need to be flexible in your trading plan and adjust it as the need arises. You need to think about what style of trader you are and write down a set of rules to follow when you are trading stocks,futures or the forex markets.

Difficulty: Moderate

Instructions

1. The first thing you need to do is write down a plan to be a profitable investor and stick with your forex or stock trading plan. You need a good broker that will work with you and offer good advise with your trading style.
   
   A: You should always follow the rules set down in your trading plan. Do not take short cuts or adjust your plan just because the trade is going against you.
   B: If I have decided to keep within a risk reward ratio I will stick with it. I will not risk more then 2% percent of my capitol on any trade. You must protect your money and not risk more then you can afford to lose. This means sticking with my stop loss percentages and let the losing trade stop out.

2. C: You need to let the profits run and adjust your trailing stops accordingly. The big profits come from letting my winners run and adjusting my trailing stop. This will lock in profits especially in fast moving forex markets.
   D: Learn a good trading system and study more to make it better. Keep records of the trades and compare them to your plan and adjust it to be more profitable. Find a trading system that suits your personality and don't change it. Listen to other traders but stick with your system when trading.

3. E: Make your trades when your plan indicates its time to make a trade. Don't look for excuses not to make a trade if your indicators are telling you to pull the trigger then you should take the trade. Trust your charts and indicators that's why you have a plan on trades in the first place.
   F: You should take time to relax and get away from trading,this will help keep your mind fresh and ready to handle the stresses that come form trying to trade the different markets. Emotions and stress can takes away profits and ruin you as a trader. Work on being consistent in your trading by sticking with your trading plan. Most traders don't have a plan and this is to your advantage.

4. At the end of a stock or forex trading day make sure to evaluate how the day went. Did I follow my plan ,did I make a profit and stick with my stop losses. Did I stick with my stock trading rules and make good choices when I made a trade protecting my capitol and taking my profits without getting greedy. Did I learn from my losses and adjust my trading plan accordingly. You need to be serious if you are going to be a profitable stock or forex trader. This type of trading plan will help you over the other traders who just throw their money away.

[vixxen]

on 10/29/2009 Great article 5*

[tracysmith159]

on 10/29/2009 Good advice.