Coming up with the best forex trading business plan is not an easy task. First you have to figure out what kind of trader you will be. So many strategies exist for different styles of trading. Are you a part time or full time trader? Are you looking for a home run trade or a steady flow of short winnable trades.
With so many charts and currency pairs to trade from as well, determining the best forex trading business plan is a daunting task.
At the most basic level most traders are familiar with the support and resistence zones of the forex trading charts. If you are not familiar with support and resistence zones yet than you should definitely learn them. These are locations that exist on each timeframe of the fx charts. What traders do is identify the turning points on each of these charts. So the support zone is the points on the chart where the market receives the most support when it is trending downward. Resistence zones are the points on the charts that receives the most resistence when it is trending upward. These zones exist for each currency pair and for every time frame of the forex charts. The image below identifies support and resistence levels as well as the extreme low and extreme high for a EUR/GBP 8 hr chart.
The best forex trading business plans always acknowledge these zones. Many strategies exist that use these zones for both entry and exit signals as well as identifying certain trends.
The most successful traders know how to read the charts. Studying the charts during the present and past is what seperates the excellent traders from the mediocre and bad ones. With so many currency pairs, and timeframes for each pairs, its a lot of charts. To fully understand them you really have to take the time to learn them in order to develop a winning and profitable plan for the future.
What helped me in my trading when I first started out was studying the charts for the later time frames. So I observed the monthly and weekly charts first since they did not move much. Once I began to understand them and identify trades on those charts that I could make, as well as an exit strategy, I then was able to observe the lower time frame charts like the daily and 8 hr more quickly.
The beauty of developing your best forex trading business plan is it is going to be unique to you. Obviously your going to learn by reading about different strategies that will give you an idea on how to trade and identify trends and trades that you can make. As you continue on your trading journey however you will identify trades and trends in the current markets that might not be written anywhere. This is due to the combination of the charts, various currency pairs, market news, indicators, and more. You basically learn how the market reacts to these bits and pieces of information and are able to make winning trades on what you have been observing and learning for yourself.