Success in trading currency requires having a plan and being clear on what you have to trade. A big important step that will reap you benefits is having your own forex checklist that will lead you along the way.
Successful forex traders take accurate step-by-step processes that is usually followed by the trader on a daily basis. A checklist will help you focus more and will not interrupt you of your natural instinctive actions as emotions tend to get the best out of us.
Forex trading requires a set of steps that need to be taken in a precise order. Possibly skipping a step many times might even lead you to missing out on gaining profit for your trading account. Checklists will more or less guide you through your trading process so you don't miss out on something valuable.
Creating a Forex Trading Checklist
A forex trading checklist must include all the factors you need to consider before you enter a trade as well as what actions need to be taken once it's open. Trading strategies mostly take into account three factors:
- Signal: what the trader needs to see before considering entering a trade.
- Entry: how the trader enters the trade and what you risk.
- Exit: what rules the trader has to exit the trade (stop loss, take profits, etc.) and where to place those orders.
The best way to follow your checklist will be separating them in sectors. The Signal is often the largest part since it includes several steps which are looking at indicators/trends and spotting zones, among others.
Write down every single step you should take when executing a trade. Once you are done, you can begin to test the checklist. You should make sure that everything is clear and simple to understand. In some cases, it will also be advantageous to pause and adjust your checklist once you have doubts.
Using a Checklist
Begin testing your own checklist, and once you have all the steps covered, you can begin executing it on all the trades. Make it a point to assess your checklist before every trading day and go through every single one before you enter a trade.
It might be difficult at first but eventually once you get used to repeating it then it becomes a habit that you go through everyday.