Given your assumed desire to be light- footed and your lack of a need for being able to market in Western Europe, we recommend starting your Forex brokerage in a less complex environment. London has an established set of regulatory hurdles and FX is therefore more difficult there. htm Offshore Financial Centers There are a number of islands such as the Cayman Islands and the Bahamas that are experienced financial services centers, though they may be less established Forex centers.

Obviously, many of these locations have fairly low-cost barriers to entry and certain tax benefits, although many of them require that the institutions they license appear to have some sustainability. asp compare. aspx  Cayman Islands, which has the largest value of AUM in offshore funds, and is also the strongest presence in the U. securitization market. Regulation and supervision of the financial services industry is the responsibility of the Cayman Islands Monetary Authority CIMA.

The CIMA licenses firms to conduct securities investment business, which includes market makers, broker- dealers, securities arrangers, securities advisors and securities managers. This is typically defined by country.

In general the rule of thumb is that registering in multiple countries can get very expensive. If you are an online company, it is possible that you will get online clients from a variety of countries beyond where you register.

At first, you may choose just to register in the countries where you are actively marketing. If you start by incorporating in Belize, for example, then just registering in the developing countries where you will initially operate is likely the most cost effective path.

However, if you find that, say, you are getting a lot of clients from a different country — it will start to make financial and legal sense to go through the regulatory hoops of the country.

Below is a discussion of two example countries, Pakistan and Bahrain and also an overview of the U. registration landscape for comparison. Currently, the SBP is not specifically regulating Forex brokerages, but a good practice would be to incorporate in an area where there is Forex licensing in order to put forth a good faith effort to follow sound regulations.

Bahrain requires that if you are selling to its citizens, you need one of their citizens to be part of your partnership, or be in partnership with a local company. Either way, you can still own the majority of the subsidiary company that is you set up in Bahrain.

asp , which is essentially synonymous with being a brokerage in the Forex arena. Two organizations police the sector and step in to protect the consumer on a regular basis.

These organizations are the National Futures Association NFA and the Commodity Futures Trading Commission CFTC. Of the two the CFTC is most heavily involved in the detection and punishment for fraud, manipulation and abusive trade practices in the retail Forex sector.

The www. gov website is an excellent source of information on customer protection and on-going legal disputes against brokers and other entities. Here is a list of some of the regulating agencies:  NFA - the National Futures Association. Capital Requirements Depending on where you are registered, capital requirements will vary.

Capital requirements are a catch-all phrase for the capital that countries, regulatory agencies or the country of incorporation will require in order to feel comfortable with you as a Forex institution.

In more highly regulated locations like the U. It is likely that startup brokerages will be required to have significant capital in the form of credit lines with a big bank. This is especially true in the case you would like to offer straight through processing or you would like to have a reasonable amount of risk control. If you want to move beyond the developing country markets where you are located, you may be required to put up a higher net capital investment.

See Section 5: Business Model for further discussion. It is possible to get credit lines from multiple banks at the same time to fulfill your total capital requirement. Technolog y Problems To be prepared for the situations Have backups and a where you need to act quickly.

Regulator y Existence Unknown regulatory environment which Ideally become a licensed can lead to regulatory investigation and entity where you are fines or other consequences. incorporated and know your local markets; hire appropriate legal talent.

Regulator y Update Forex is relatively new and faces Focus on simple regulations that are changing daily. securities first, and then move into more complex and highly regulated securities.

Location of Incorporation Incorporating in an offshore area The Cayman Islands has a usually means that you are in a less- strong reputation for experienced country for dealing with financial services. Belize Forex issues. has a good deal of Forex experience. Both of these locations also provide more flexibility and lower startup costs than many other countries. Countries of Registra tion You may get customers from Start with countries where countries where you are not you are actively marketing, registered.

then move to new countries if customer concentration increases in new places Taking Risk as a Counte r - Taking the other side of trades that Hedging trading risk with Part y go against you risks your capital.

liquidity providers. Fixed Costs Not enough income to pay the Make sure that you pay operating costs. your recurring costs from your recurring revenue. Market Description Forex is an emerging market with many disaggregated players. The diagram below provides an overview of the major players and how they interact. Currency trade values are in the multiple tens of millions of US dollars at a time.

These trades are the ones that really set the price of a particular currency. They are used for speculation, hedging and currency exchange for international commerce. The prices are determined with less variability than smaller players. Regulation: These entities have similar regulations to large broker houses. However, in some developing countries, spreads are even larger, at Pips. In general, this industry is still growing a great deal, and is thus in flux.

Best practices are to get licensed in your country of incorporation to start, followed by a careful review of the regulations in countries where you are marketing. Daily averages in April for different years, in billions of US dollars, are presented on the chart on the following page.

institution; and, Retail traders small speculators are a small part of this market, but constitute a growth opportunity. Please see a listing of the Top Ten on the following page. This includes being a pass through, or being counterparty. Here, the broker makes money regardless of the market movements ASSUMING his technology is able to act quickly and without errors to unload the risk from the customers to the liquidity providers.

This is not zero risk! Errors can happen. Risk has to be monitored and controlled at all times. If you offer a 1. Of this, 1 of these pips goes to you, and 0. Commissions - The maximum number of pips you can realistically charge in the U. is about 2. In developing countries, you can actually charge higher commissions — up to 4 or 5 pips. Here, we give an example of charging a commission of 1.

The customer pays 1. Multiply this by the U. The customer buys from the broker and sells to the broker. If the customer makes money, the broker loses money, and the contrary. This model is simpler, but riskier. They take small profits, and let losses run. Ongoing customer acquisition is thus very important. In this model, some of the more experienced or savvy customers will grow frustrated that they are not dealing with Straight Through Processing.

Segmenting these customers out and dealing with them through a Straight Through Processing model is usually a good idea. Below we discuss such hybrid models. Technology The example below is an illustration of how a large multi-platform, multinational, multi liquidity provider brokerage organization looks.

It will usually offer multiple trading platforms, one of which will be mostly for retail maybe MetaTrader 4 and one of which will be mostly for institutional investors see red boxes. It will also use multiple specialized liquidity providers banks, in blue.

Each liquidity provider will offer different spreads for different pairs and different volumes for each pair. In general one can acquire a platform for a flat fee plus a monthly fee. MetaQuotes has developed a new platform, MetaTrader5 MT5 , and an upgrade fee should be expected. In this case over the 1st year one will end up paying less than in the case of buying a platform but over time one will end up paying more.

Tradeoffs In general the less you pay the more dependent you are on somebody else. If one purchases a platform one needs to also pay for its maintenance, add-ons, updates, and IT personnel to maintain and upgrade it.

The broker who owns a platform fully controls it. If one uses a white label one rarely has control over the minimum spread which is usually imposed on him with a markup of course.

In addition the white label provider could theoretically shut down the access and the platform at all times. In the case of leasing a platform the control is somewhere in the middle. Platform features Before you choose a platform you have to decide on the features that you are looking for. Such an investment only makes sense in the case when the broker would like to have FULL control of the platform features and potential and in the case when the broker is envisioning becoming part of the top largest brokers in the world.

How to choose the platform and set of services that is right for you? We have put together a model that estimates the margin gain in each step of the value chain, and what that means for the cost to the customer of the entire transaction.

Counterparty - You need a counterparty for all your trades. You need to set this up in advance, but counterparty is a relationship for each major trade. They just take the other side of a trade, but you can switch counterparties on different trades. As counterparties, a large bank will be a market maker, whereas an ECN is just an exchange — they find someone else to make a match against you.

Thus, for practical reasons, sometimes it is easiest to use a counterparty favored by your Prime Broker, because they already have a relationship. Example: here, we have chosen ODL as our counterparty, which charges 1.

Prime Broker - Your Prime Broker is your credit source — it is a bank that provides a service to you. For this relationship, you need to put money down in an account with that bank, and also pay a fee per transaction. There are several types of Prime Brokers, with varying associated  UBS, Barclays and DeustcheBank are the most expensive.

These companies service fees. large companies, governments, and other large institutions. leverage, but also the risk of losing everything. com — because time of something, against a counterparty might be ODL, or not.

ODL is easier to start with. The upside of something like ODL is that it allows you to start with low startup costs. The downside is that fees are higher. The bank or prime broker that you work with will provide you leverage for trading — i. Usually, however, banks provide at most leverage.

edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser. E x i t S t r a t e g y every action should be spelled out, so that in the heat of the moment you do not have to make any decisions, you just follow what the trading plan stipulates. Jose Antonio Muñoz. Log in with Facebook Log in with Google. Remember me on this computer. Enter the email address you signed up with and we'll email you a reset link. Need an account? Click here to sign up. Download Free PDF.

TRADING PLAN TEMPLATE CONTENTS. Teodor Kiryakov. Continue Reading Download Free PDF. Related Papers. How to Make a Living Trading Foreign Exchange. Download Free PDF View PDF. TRADING PLAN TEMPLATE C o p y r i g h t © Tim Wilcox Disclaimer All reasonable steps and due diligence have been taken in preparing this document.

However, it may contain ideas that are not appropriate to you or your style of trading, so do your own research and draw your own conclusions. By itself, this document will not enhance your trading performance, nor will it prevent you from incurring losses.

Any losses that are incurred are the sole responsibility of each trader. TRADING PLAN TEMPLATE ©TIM WILCOX CONTENTS Introduction Page 3 TRADING PLAN OVERVIEW 1. What is a Trading Plan? Page 4 2. Who Needs a Trading Plan? Page 4 3. What Will a Trading Plan Do? Page 5 4. Before You Start. Page 6 TRADING PLAN TEMPLATE 5. Know Yourself, Know Your Purpose Page 9 6. Trading Goals Page 11 7. Tools of the Trade Page 13 9. Before the Market Opens. Page 14 Exit Strategy Page 21 After the Market Closes.

Page 24 Page 25 Golden Trading Rules Page 26 TRADING PLAN EXAMPLES Roll Up, Roll Up. com T2W. The purpose of the thread was to produce a template by which all traders - regardless of experience, instruments traded, timeframes and brokers etc.

This document is the result of that thread. It comprises two main sections with a third section that in time will, hopefully, contain examples of real plans created using the template. T R A D I N G P L A N O V E R V I E W The Trading Plan Overview addresses fundamental questions regarding the subject, starting with a simple definition.

It then moves on to discuss why traders need a plan at all and, once they have created one, what it will do for them.

Those traders who are already convinced of the merits of having a plan, please feel free to skip this section! It comprises ten key units, with a series of questions in each one: about 50 in total. The hope is that any trader can use the template to create their very own bespoke trading plan. Make no mistake, it will take time and effort to complete. But, having done so, you will at the very least, gain a greater insight into the kind of trader you are now and enable you to focus on the kind of trader you want to become.

Explanatory notes and an outline for a possible answer accompany all the questions. For ease of navigation, there is a reference number at the start of each paragraph. If you get stuck at any point, help is at hand from fellow T2W members. In order that other traders may benefit from your amendments, please post your ideas on the thread above.

T R A D I N G P L A N E X A M P L E S Currently, this section contains no trading plan examples. In an ideal world, it would house at least three complete trading plans: one for index futures traders, one for forex traders and one for stocks traders. The icing on the cake would be if they also covered the three main timeframes: day trader, swing trader and position trader.

In itself, a plan is not an edge but, over time, the trader with a plan will fair a lot better than the trader without one. Many amateur traders do not have any sort of plan to trade by, and enter the markets with scant regard to their risk and profit objectives. Suffice to say, comprehensive risk and money management strategies lie at the heart of all good trading plans.

They can evaluate their progress continually, day-by-day, in a way that is objective and comprehensive. This enables them to trade without emotion and with minimal stress. The trader without a plan is not able to do this and their trading tends to rely upon gut feeling, hunches and tips etc.

Trading for them is a nail biting, emotional roller coaster ride of stress that, inevitably, results in financial loss. However, a good plan that is adhered to strictly will help to minimise losses and enable you to stay in the game a lot longer than traders who do not have a plan. This is why a plan is essential. It is a list of strategic responses to events beyond your control. As stated above, the former is a complete set of rules that governs every aspect of your trading life.

It goes into great detail and may, for example, stipulate the amount of time devoted to reading threads on T2W! However, these are merely elements of an overall trading plan and possibly not even the most important ones.

It is perfectly feasible, desirable even, to include two or more trading strategies i. entry and exit criteria within an overall trading plan. If you have achieved this, then this document may not tell you anything you do not already know. It is quite literally the route that will take you from where you are now to where you want to be which, for most traders, is consistent profitability.

In this analogy, consistent profitability is the destination. Similarly, to embark on trading without a clear idea of where you are going, and how you are going to get there, will almost certainly result in increased stress, sleepless nights and financial loss - or all three. The question you must ask yourself is this: if you would not dream of driving from the north of Scotland to the most southerly tip of England without a detailed roadmap, why on earth have you not got a detailed and clearly laid out trading plan?

It will limit your opportunity to make bad trades and it will prevent many psychological issues from taking root. It will help you to achieve these things because wherever you are on your trading journey, it will not only act as a roadmap, but also locate your position as well. Most importantly, if your trading is going badly, you will know it is down to one of only two possibilities: either something in the plan is not working or you are not adhering to the plan.

If the plan is a good one and it is back tested and paper traded, or forward tested with a very small amount of money then the fault is likely to be found in the latter of the two options. But, what if you are losing money whilst trading without a plan? It is virtually impossible to distinguish what you are doing right from what you are doing wrong.

You have no way to evaluate your results, therefore the likelihood of being able to diagnose the fault and correct it is small and could take forever. A trading plan is your personal GPS device to locate your position and, if you have made a wrong turn, it provides the means to identify where you went wrong and how to get back on track.

You are able to evaluate continually your results and, more importantly - your discipline - in a manner that is objective and comprehensive. This is extremely difficult to do if you do not have a plan. Emotional issues will become very powerful when real money is on the line and, as likely as not, force you into making irrational decisions. A plan will instil a large measure of discipline into your trading. How many times have you let a loss run and cut a profit short because it was the comfortable thing to do?

The template is broken down into eleven units. The objective of the exercise is to end up with a plan that is tailor made to suit your personality, ability and resources.

Do not be tempted to skip any sections and be sure to work through them in the order that they appear. The order is specific for reasons that should become clear in due course. Think of the eleven units as links in a chain or as individual players in a football team; each one is as important as the other.

Although the template is designed to be as simple as possible, be sure to give careful consideration to all your answers. For example, the first unit poses the question, why do you want to be a trader? It is not personal to you and, therefore, it is not helpful to your plan. You might enjoy a cappuccino from time to time, but chances are that you would not dream of taking up a Starbucks franchise - so why become a trader?

If so, you may have a need for excitement. Ordinarily, such a desire is an admirable one but, in the markets, it could easily lead to catastrophe if allowed to go unchecked. Perhaps you have heard stories about traders making tens of thousands in a single day? Crushing disappointment is often the reward for unbridled greed. Pie in the sky fantasies about trading via a laptop while aboard a luxury yacht, sipping champagne in the Bahamas, are great fun, but they are hardly grounded in reality.

Such fantasies may help to motivate you to study the markets, but the emotions that accompany them may not help you when it comes to trading the markets. Just as the trader with a lust for excitement is doomed to fail, the fate of a trader motivated by greed is almost certain to lead to disaster.

Think very carefully about these questions and be brutally honest with yourself. Do not pretend to be someone you are not because you are embarrassed to commit pen to paper and admit that you are a thrill seeker chasing the Holy Grail of easy money.

In answering the question about why you want to be a trader, you will uncover the real motivations, fears and desires that fuel your ambition. Some of these will be helpful whilst trading, others not.

How you allow them to impact your trading is what this document is, to a large extent, all about. To ensure that the impact is a profitable one, you must start by examining your real reasons for trading and, hopefully, learn more about yourself in the process.

Then there is a basis for an answer in small Arial italic type, like this to provide further clarification. The latter is intended as a guide only and is not meant to constrain your thoughts and ideas in any way. There is no room for ambiguity in your plan; so avoid vague, fuzzy statements. Also, where possible, always define and qualify your statements. This usually means posing the questions - what, when, where, why or how. For example, suppose you swing trade the Dow Jones 30 Index.

Why the DOW and not the FTSE ? Because you want to trade in the evenings, after work? Okay, fair play. How will you ensure your success? Aha, you will start by writing a trading plan? When will you write it? You get the general idea. Now, let us begin. Know Yourself, Know Your Purpose 5. Many inexperienced traders are unprepared for the violent assault on their thoughts and emotions at the start of their careers. They soon find their heads spinning with euphoria when winning greed and the pits of their stomachs knotted with anxiety when losing fear.

Contrast this with many professional traders who, it is said, achieve a sort of trading nirvana, whereby their thoughts and emotions blend into a sea of calm regardless of whether they are winning or losing. Their heads do not spin and their stomachs do not churn — ever. For you to achieve this exalted state, you will need to know yourself and how you will react to both winning and losing positions. Once armed with this information, your trading plan can incorporate some of the positive aspects of your psychological make-up and filter out some of its negative aspects.

What is your purpose - what does success as a trader mean to you? Decide what it is that you want to achieve and then ask why and how trading is going to provide it. How sad it would be if, after a year or more and hundreds if not thousands of pounds later, you realised that trading was not for you after all and that the ladder to success was leaning up against the wrong wall.

Okay, here goes — your very own trading plan starts now. Question your true motivations. Examine whether your talents would be better suited to another business like the Starbucks franchise mentioned earlier. Are you certain that trading is the right business for you? If you believe that the markets exist for the sole purpose of showering you in vast quantities of easy money — then think again! Beware: it is NOT the easy option! I want to be a trader because. My primary objective in wanting to be a trader is to.

My secondary objective is to. spend more time with my family and enjoy the freedom of being able to trade from anywhere in the world. These objectives are important to me because. they provide purpose and direction to my life and enable me to lead a more balanced one. I believe I can achieve my objectives because. my name is Larry Williams - say no more! Are you a discretionary trader or a mechanical one? Do you propose to trade in the long-term i.

months , medium-term i. weeks or short-term i. days or, even, intra- day? The choice of position trader, swing trader or day trader will, to a large extent, be determined by the amount of time you are able to devote to your business.

Generally speaking, day traders remain glued to their monitors throughout the duration of every trade, whilst position traders may devote as little as one hour a week to the markets. Define your trading style and examine your beliefs about the markets. I am a discretionary trader and my style is very.

aggressive - which makes me suited to scalping intraday or, alternatively, conservative — which makes me suited to swing trading end of day E. I understand that I cannot predict the future and I accept that I cannot control the markets. However I can control myself, which I will do by. adhering strictly to my trading plan that is detailed, specific, tested and profitable. List each of your trading strengths and weaknesses and then specify how you will maximise the benefit of the former and minimize the damage caused by the latter.

This is often easier to do for other people than it is to do for yourself. Your background may provide some clues. Suppose you are an ex-fighter pilot who is used to working in a highly disciplined environment and adhering to a set of very strict procedures. Potential strength. However, the flip side of the coin is that you may also have a need for fun, or an addiction to adrenalin pumping, nail biting excitement or, even, a subconscious desire to experience fear.

Potential weakness. If you are struggling to answer this question, try paper trading for a while and examine each trade, noting what you did right and what you did wrong. Do this until a pattern starts to emerge which should reveal your strengths and weaknesses to you. My primary strength is. allowing my profits to run and closing trades in accordance with my exit strategy.

My secondary strength is. My primary weakness is. wanting to recoup a loss quickly which, almost inevitably, results in increased losses. The following aspect of my trading plan will help to control this weakness and prevent losses from spiralling out of control. I have a pre-defined daily stop. If it is hit, I stop trading for the day. My secondary weakness is. Your mindset is the key obstacle that lies between you and success in the markets.

Have you slept well; are you fit, healthy and mentally alert? Are you calm and relaxed or are you tired and distracted by other events in your life? I am rested, relaxed and not distracted by work or family etc. I will be guided by my trading plan and I will adhere to it rigidly. It will help to prevent me from making trades that are poorly conceived and executed; i.

I will not trade on days when. I am feeling off colour, hung over, particularly tired or when I am mentally distracted by other events in my life.

There are numerous reasons for becoming a trader; making money is the one reason that unites us all. Your targets are not idle fantasies, they must be based upon your back and forward testing results.

This is expanded upon in sections My financial targets are. Trading Goals 6. Try to define your goals in terms of your development as a trader, as opposed to purely financial goals.

If you focus on becoming a proficient trader, the financial rewards are sure to follow just as night follows day. Then decide how you will achieve these goals and how you will reward yourself once you do. The rewards should reflect the scale of the achievement as well as being specific and meaningful to you. For example, the reward of a night out should name both the venue and the people you intend to take with you. This is the big picture.

Think in terms of the skills and knowledge that you want to acquire between now and this time next year. My annual trading goal is to. At the moment, this comprises three separate elements, namely: 1. If you find that a forex broker is unable to do this, we would suggest you find a better broker as it is standard practice these days.

All of the brokers listed towards the end of this forex trading PDF are regulated by at least one reputable licensing body. In terms of getting set up as an online forex trader, the steps remain constant regardless of which broker you decide to join.

Below we list some of the steps that you will need to take. In order to open an account, you will need to enter some personal information.

Standard details requested by the broker will be things like your name, residential address, and contact details. Some brokers will also require your tax status and will ask you to provide more financial details such as employment status, net worth and any regular income.

In this instance, you will usually need to answer some multiple-choice questions based on your experience. This is usually a fairly simple process. Known as KYC in the industry Know Your Customer , this simply means that the forex broker is going to need you to prove who you are. Some brokers will verify this using scanned copies of documentation. Now you need to select your payment method of choice usually from a drop-down list.

Bear in mind that how long this takes to go into your trading account will largely depend on the payment method — so always check this before parting with your cash. Some brokers even support e-wallets like PayPal and Skrill. After reading our forex trading PDF you should now be feeling confident enough to begin trading. However, we do recommend that you always try out a free forex trading demo first.

This will allow you to test out your newly formed trading strategies before risking your own capital. In the next section of our forex trading PDF, we explore some of the more important technical indicators and market insights used by seasoned traders. First invented by Richard Donchian, the donchian channels can be adapted as you like, in terms of parameters. Should you choose to view a day breakdown, for example, the indicator will be created by taking the lowest low, and the highest high of that period so in this example 30 periods.

When observing the moving average on a donchian channel you can look at averages stretching from 25 days to the last days. The direction which is permitted is determined by the direction of the short-term moving average.

With this in mind, you should think about opening one of the following two positions:. You will need to sell your pair in order to exit your trade if you open a long position and visa-versa. This is another commonly used forex indicator. The simple moving average aka SMA operates at a slower rate than the present market price known as a lagging indicator.

Furthermore, it uses a lot of historical price data. In fact, more so than most other strategies. A good indication that the latest price is higher than the older price is when the long-term moving average is below the short-term moving average.

This could be considered a buy signal due to an upward trend in the market. In the opposite scenario when the long-term moving average is higher than the short-term moving average, this of course points towards a sell signal due to a downward trend. Moving averages are usually used as evidence of an overall trend, rather than purely forex trading signals.

Of course, this is a great way to make your breakout signals much more productive. If you are alerted to a sell signal, this indicates that the short-term moving average is below that of the long-term moving average, so you might want to place a sell order. However, if you are given a signal to buy, this usually means that the short-term moving average is higher than that of the long-term moving average.

Using breaks as trading signals, the breakout is considered a long-term strategy. The breakout itself occurs when the market goes further than these consolidation limits — whether that be lower or higher.

As such, a breakout must take place whenever a new trend occurs. By looking at breaks, you will have a good indication of whether or not a new trend has begun. In this case, you might want to use a stop-loss order to give you a better chance of avoiding a substantial loss.

As glamorous as a career in forex trading might sound, there are a number of risks that you need to take into account. In the below sections of our forex trading PDF, we explore these possible risks in more detail.

The transaction risk is in relation to the exchange rate and any time zone differences. This means there is a chance that at some point between the beginning and end of a contract that the exchange rates could be subject to change. The risk of this happening elevates with the more time that passes between entering a contract and settling the same contract.

This generally leads to investors withdrawing investments, and as a result, your return will be lower. The good news is that when a currency rate is on the rise, chances are that the respective currency will be stronger. When this does happen, your returns could be higher. This is because seasoned investors like to gain exposure to stronger currencies. The higher your leverage is, the higher your losses or benefits will be.

Of course, this means leverage can affect your trading in a positive or negative way — depending on which way it goes. The final part of our forex trading PDF is to explore which brokers are popular with both newbie and seasoned traders. Each of the forex trading platforms listed below has been pre-vetted, meaning that you can be confident they tick most boxed. This means that each platform is regulated, offers heaps of forex pairs, has low commissions and fees, and supports several payment methods.

AvaTrade is an established broker that offers thousands of financial instruments. On top of stocks, indices, commodities, and cryptocurrencies all via CFDs , you can also trade heaps of forex pairs. There are no trading commissions to pay, and spreads are very competitive. You can either trade via the AvaTrade web-platform, or via popular third-party provider MT4. The platform is heavily regulated, with several licenses under its belt.

com is an FCA, CySEC, ASIC, and NBRB-regulated online broker that offers heaps of financial instruments. All in the form of CFDs - this covers stocks, indices and commodities. You will not pay a single penny in commission, and spreads are super-tight. Leverage facilities are also on offer - fully in-line with ESMA limits.

Once again, this stands at on majors and on minors and exotics. If you are based outside of Europe or you are deemed to be a professional client, you will get even higher limits. Getting money into Capital.

Having made it this far through our forex trading PDF, you should by now have an understanding of how technical analysis works, and have a good grasp of the macroeconomic fundamentals which guide currency values.

Armed with all of the useful information included in this guide, you should be ready to get out there and start trading forex. Hopefully, making a profit and learning more along the way. If you are a trader with somewhat limited funds, you might find that swing trading suits you best. If you have a larger trading fund available to you, you might have a more profitable experience with fundamental based trading. Either way, w e do recommend trying out a free demo account where possible before trading with your hard-earned money.

As well as reading helpful guides like ours, actually learning by doing will also provide you with a better sense of how it all works and how you might like to trade yourself. What does forex mean?

Needless to say that having a plan before you start trading is essential to your success as a trader. After all, when you enter the markets, you risk your money and, more importantly, your ego and confidence in yourself.

Ironically, some people have special trading skills , but they cannot develop and build a successful trading plan. This article will help you with everything you need to know about developing a trading plan. As the name implies, a trading plan is a set of rules and guidelines that a trader follows to execute a trade. Besides that, a trading plan might include suggestions for a healthy trading daily routine and tasks that will help you manage your account and control your emotions.

For example, with a trading plan, you can define your trading goals, strengths and weaknesses, risk management strategy, trading strategy, entry rules, exit rules, daily routine, etc.

So, now that you understand what a forex trading plan is, you need to create your own specific plan that matches your style and personality. Personally, while working as a trader in a proprietary trading firm , I remember every trader had a different method, routine, tasks, and rules. For example, some traders like adding sticky notes on their desktops while others prefer a clean table. Further, some traders enter hundreds of trades in one trading day while others enter one or two trades in a day.

Nonetheless, based on my knowledge and experience, there are some must-have steps you need to consider to develop a successful trading plan. By clicking the 'Download' button you agree to our Terms of Service and Privacy Policy. First and foremost, you must define your goals. In other words, you will need to know what you plan to achieve from your trading experience.

Instead, some traders do it for fun, a hobby, or a competitive game. So consider these factors as well. If this is the case for you, then you need to know it before you start trading. Maybe it gives an advantage over other participants in the forex market.

Before you make your first trade in the forex market, you first must understand the trading jargon and the different analysis methods.

If needed, take a quick trading course to learn how the forex or the stock market works, read articles, books, financial sites, etc. Additionally, you better explore the two methods to analyze financial assets — technical analysis and fundamental analysis.

Then, find the best way for you to analyze the markets and read forex charts. Additionally, you can learn how to read popular chart patterns and use them to find trading opportunities. Once again, you have to try before you know it… go ahead and try. There are no two traders that are precisely the same. Therefore, you must find your own trading strategy and trading style. And this is a result of trial and error.

For that matter, you need to use a trading plan at the beginning of your journey to find the right strategy that matches your personality. Trading risk management is a predefined strategy to minimize losses and maximize profits.

There are lots of tools and risk management rules a trader can use to protect themselves from losses and effectively manage their trading account.

In other words, it is a method to define your trade risk, that is how much risk you are willing in a trader, or in a day the method is particularly for day trading. Trading is not like most professions. The markets always change, the technology evolves, and even the dynamic of the markets is constantly changing. Trust me, financial markets are not the same as they used to be fifteen years ago, and most likely, they will change again in the future.

I mean, the cryptocurrency market is one good example of the unpredictable nature of the trading world and financial markets. This way or the other, you must read trading books and articles, watch movies , listen to podcasts — everything you can do to increase your knowledge.

Yes, knowledge is power, but in trading, knowledge is essential. In the final step, make sure you analyze your trading past performance and keep track of your winning and losing trades.

Writing down your losing trades is a punch to your ago, but it will help you improve your performance and trading decisions in the future.

By doing so, you can learn your worst-performing days of the week, hours, financial instruments, etc. George Soros. To sum up, we have created a trading business plan template that you can use for free in the format of your preference.

In a nutshell, every trader must have a well-defined solid trading plan. Developing an organized trading system is the first step in becoming a professional and successful forex trader and will increase your chances of success over the short and long term.

For now, you can use our free forex trading plan template to start with. Then, add notes, tasks, or any other inspirational quotes you think will help you to trade better.

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Trading the financial markets carries a high level of risk and may not be suitable for all investors. Before trading, you should carefully consider your investment objectives, experience, and risk appetite. Only trade with money you are prepared to lose. Like any investment, there is a possibility that you could sustain losses of some or all of your investment whilst trading.

You should seek independent advice before trading if you have any doubts. Past performance in the markets is not a reliable indicator of future performance. com takes no responsibility for loss incurred as a result of the content provided inside our Trading Room. By signing up as a member you acknowledge that we are not providing financial advice and that you are making the decision on the trades you place in the markets.

We have no knowledge of the level of money you are trading with or the level of risk you are taking with each trade. The HowToTrade. com website uses cookies in order to provide you with the best experience. By visiting our website with your browser set to allow cookies, or by accepting our Cookie Policy notification you consent to our Privacy Policy, which details our Cookie Policy. Free Courses Trading Room Blog Contact Us Caution: Trading involves the possibility of financial loss.

Only trade with money that you are prepared to lose, you must recognise that for factors outside your control you may lose all of the money in your trading account. Many forex brokers also hold you liable for losses that exceed your trading capital. So you may stand to lose more money than is in your account. com does not guarantee the profitability of trades executed on its systems.

We have no knowledge on the level of money you are trading with or the level of risk you are taking with each trade. You must make your own financial decisions, we take no responsibility for money made or lost as a result of using our servers or advice on forex related products on this website.

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It is essential that you know what you did right and, more importantly, what you did wrong. The pip refers to the movement of one decimal place in a pair. If you want to buy and sell currency pairs from the comfort of your home or even via your mobile device , you will need to use a trading platform. If you have a larger trading fund available to you, you might have a more profitable experience with fundamental based trading. This document will explain the functioning of the risk management tools and their meaning. Arguably, virtually all strategies fall into one of three generic groups: breakouts, retracements and reversals. Should you choose to view a day breakdown, for example, the indicator will be created by taking the lowest low, and the highest high of that period so in this example 30 periods.

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