What “toys” will you utilize in your forex trading career?
Make a list of the hardware, software, data sources, furnishings, and internet access required for your currency “trading desk.”
Don’t forget about backups! Make a backup plan for everything in case your main tools fail while you’re on the job.
What if your computer crashes and does not restart?
What if your internet connection fails?
What if your power goes out?
What if your keyboard breaks down?
Finally, don’t get taken in by all the razzle-dazzle currency trading scams! try to entice you with.
Do you really require the $5,000 chart pattern recognition software seen in 4D IMAX?
Most likely not. Instead, save your money and use it as trading capital.
Which Broker Platform should I Use?
Where will you carry out your trades? You can’t just contact the bank and say, “I want to go long EUR/USD.”
Okay, you could have done this in the past (if you had a million dollars), but we’re now in the twenty-first century.
It’s time to get started with those online trading platforms!
But it’s not that easy.
Make sure you understand everything about the broker you choose, from placing orders to depositing and (hopefully) withdrawing funds.
Please read our “Choosing a Forex Broker” lesson. You will not be sorry!
21 Questions You Should Ask in Your Trading Plan
Lack of planning is one of the primary causes of business failure in many cases.
If you want to be successful in life and business, you must have a strategy in place.
Trading is no different from any other type of business.
Just like any other business, you should have a written business plan for your trading.
Those who do not plan their trading like a business will fail.
Here are twenty-one critical questions to which you should have answers as part of your trading strategy:
- What are your specific reasons for wanting to become a trader?
- What do you hope to gain from trading?
- What are your biggest strengths?
- What are your biggest weaknesses?
- How do you plan to address your weaknesses and leverage your strengths?
- What are the things that are going to separate you from the large majority of traders who fail? (Answering with “hard work” isn’t enough. Lots of hard-working traders still fail.)
- Will the things you mentioned above actually give you an edge in the markets so your trading outcomes generate a positive expectancy?
- What market or markets do you plan to trade and why?
- How much time can you devote to actively following the FX market? And the overall financial market?
- What is your trading style? Do you plan to scalp, day trade, swing trade, or position trade?
- Do the trading style(s) you’ve chosen reflect the reality of the amount of time that you can devote to trading?
- At what times throughout the day (or week) are you going to spend actually trading, researching trades, and then learning about the market?
- What trading system(s) will you be using (your criteria for entering and exiting trades)?
- What is your risk management strategy?
- How will you know if your trading system or strategy stops working?
- After you’ve identified that your trading system or strategy has stopped working, what will you do to address it?
- What trading software and equipment you will use to trade and how much is it?
- Who will you use to access the markets? What broker(s) will you use?
- How much money do you plan to start to trade with? Is this money you can afford to lose without negatively affecting your current standard of living?
- Do you plan to add money to your account and if so where is that money going to come from?
- If you are profitable, do you plan to reinvest profits or withdraw some or all of them?
If you’re serious about trading, consider the following questions.
Direction and a sense of purpose are required for growth and success. Which must first be identified and stated clearly. They will not appear by themselves.
A clear roadmap forces accountability and responsibility, which may result in a change in the plan (for example, when your trading system or strategy fails). This is excellent, but you won’t know if modification is even necessary unless you define what is “working” and “not working” in unambiguous terms.
Risks can be transformed into opportunities, but first you must identify the dangers. If you don’t, when they arrive as a crisis, you’ll be on the back foot, possibly panicking, and making poor and unprofitable decisions.
As you can see, there are a lot of factors to think about before pressing the buy or sell button on your trading platform.
Answering each question does not guarantee trading success, but failing to answer such questions almost surely does.
You have an option.
The quality of the planning is usually proportionate to the quality of the results.
Don’t put yourself in a position to fail. Prepare yourself for success.