In this video:
00:50 Andrew’s actual trading plan
03:06 The entries and exits with different entry criteria
04:17 Maximum risk per trade
07:01 A client with 7/7 profitable trades
08:14 Expecting non-farm payrolls next week
Today I’m going to talk about my trading plan but first of all, do you have one for yourself? If not let’s find out more about what a trading plan should have in it right now.
Hi it’s Andrew Mitchem here the Forex Trading coach. Today is Friday the 4th of October 2013. And that’s right I want to talk about having a trading plan. I want to explain my trading plan which I have right here and it’s something I talked about on my live webinar with my clients last night. And I also want to ask you, do you have a trading plan for yourself because if you don’t, it's something that I strongly advise that you should have and if you'd like a copy of what I have here, there’s a blank copy, you can fill in your own version then please email me [email protected].
So let’s get into it.
This is my trading plan and as I mentioned, I talked about this on my webinar yesterday. I split it up into different areas. I'm going to look down at my notes here and talk about what’s on my plan. Now I split it up to start with into the actual trading side of things. What I’m going to be looking at in terms of what currency pairs am I going to trade and personally for me I’m going to trade all twenty six currency pairs that my broker offers plus gold and silver. Because I’m not worried about what the currency pair is that I’m trading because I live in New Zealand, I don’t just trade NZD$, the NZD/USD or NZD/JPY, it doesn’t matter. I'll trade any one of the twenty six currency pairs that my broker offers it all depends on what the setup is and as long as the setup is good enough for validating what I see is a good trade. But that’s what suits me, you may say, “Well I’m only wanting to trade the major pairs or I’m only wanting to trade AUD pairs or the Yen pairs, whatever it might be but for me all twenty six pairs.
Days of the week that I’m looking at trading well again for me as a full time trader I'll look Monday through to Friday, it doesn’t matter to me what the day of the week although when I’m trading the shorter time frames as I mentioned further down into this, I am not trading on a Monday until the European session and I don’t trade after midway through the European session on a Friday and Tuesdays, Wednesdays and Thursdays when I prefer to look at the one hour charts. The rest of the days I look at the four hourly charts and the daily charts. But again I've split it up into when I will trade, when I won't trade. Times of the day in times of the year that I don’t like to trade, for instance leading up to major public holidays like Easter and Christmas, New Year, etc. Just before non-farm payrolls, you know I won't trade that. Again on here when I won't trade the setups that I’m looking at taking: What exactly is it that I’m looking at does that change for different time frames or different pairs. Write it down so you can go and say, “Well does this setup that’s right in front of me now on the chart here does that meet the criteria of my trading plan?”
Different Entry and Exit Criteria
Then I’ve mentioned entries and exits so on different time frames I have different entry criteria. On some time frames such as the daily charts I split my position. I take some of the market and another part of my position at the retracement so I split that order. I do the same on four hourly charts but on the one hour charts I entered just at the market only. But I’ve got that written down step by step detail here. Now my stop losses, where am I going to place my stops and why? Are you going to trail stop so you’re going to close positions out when a certain profit target is reached? If the trade goes against you by a certain amount will you look at closing some or all of the trade? Those type of things, have them written down, have a plan.
Again profit targets, as I mentioned again and here I split them up personally for the three different time frames that I prefer to trade which are the daily charts, the four hourly charts, and one hourly charts. My ongoing trade management – what would I do with the trade when it’s open? If I see reversal candle will I look at closing the trade? How much all the trade, part of the trade? What is it that’s going to make me intervene with that trade?
My Trade Risk
Then I’m talking about the risk on the next page. My maximum risk per trade, how much is that? For me it’s half of one percent. Sometimes I trade a quarter of one percent. How much I want to have risk at the market at one time so in other words if all these trades behind me here, if they all went wrong, what’s my maximum exposure into the market and again for me my personal threshold is 5% so if all these trades behind me here on this one account go wrong which is highly unlikely especially if you’re considering you’re in good money at the moment but if it did go wrong I know that I have less than a 5% loss of my total account. Now with these trades here I'm up about 3% when I look at just before I made the video. But if they all went wrong I know my total risk.
How many trades will I lose in a row before I maybe take a break or stop trading for the day if that's what suits you. And then at the end goals, how many trades am I looking at taking per day or per week? What happens if I reach my weekly amount of either pips or percent because I either talking pips myself but if I’m looking at maybe making let’s say 2% per week on average. What happens if I’ve made that 2% by Tuesday, do I stop trading? Do I continue trading? Whatever it is, write it down because then you have got rules in front of you to stick by. And right at the end, trade reporting.
How do I record my trades? Do I take screenshots? Do I use something like MyFX? What is it that I use to report my trades? And then on the very last section here I've put about a contingency. What happens when things go wrong? My MT4 details, my login numbers, my server numbers, my broker’s details, email address, phone numbers. What will happen if my computer went wrong? Who do I take it to the fix? What happens if the Internet goes down? Do I have a backup to the Internet? Do I have a remote server, virtual server? Whatever it is make sure you have all of that written down. So when you need that in an emergency you have it all here.
So I hope that helps you. As I mentioned I did talk about that with my clients last night and we went through that whole session. So it was something that they found really useful and if you would like a copy please do email me. Talking about the webinar let me put that down.
New Client makes 7 out of 7 winning Trades
Talking about the webinar, well we had a bit of time with a new client who's only been trading with me for just under two weeks called Edward and Edward now up until when I started this video has had 7/7 profitable trades. On the webinar yesterday he took one and prior to that he had 6/6. He took one yesterday which also made profit. So 7/7 is up almost 6% on his first seven trades he's just emailed me and I’ve seen I’ve got a USD/CHF trade on right behind me here over my shoulder that’s up around 1.4 to 1 risk to reward at the moment and I think he’s got a profit target of a risk to reward of 1.8 so it’s almost there. If you can see the trade here it’s almost into full profit so if that US Franc continues to fall that’s 8/8 trades for Edward on the one hour charts taking trades independent by himself after only studying my course for two weeks.
So it just shows what can be achieved when people stick to the rules and take trades according to the rules because that’s part of trading hence have the trading plan.
No Non Farm Payrolls Today
Last thing I want to talk about. Today should be non-farm payroll day but with all the government issues in the US and the shutting down of the government sections and departments there’s no non-farm payrolls today so I'm expecting the non-farm payrolls to be next week, I believe Thursday is the latest I heard but of course the way things are going over there, that could well change again so keep an eye out for the news because things like non-farm payrolls, you do need to be aware of them of that news announcement, those high impact news announcements even though like myself I’m a technical trader and they do change from time to time. I don’t think I can honestly remember a time in almost ten years of trading that the non-farm payrolls had been moved. I can’t off the top of my head think of that happening before. It may have, but maybe once in the ten years that I’ve been trading Forex live but non-farm payrolls are not on the usual day which is the first Friday of the month so keep an eye out for things like that because things do happen and news announcements do change.
So that’s it for now. Have yourself a wonderful weekend. Look forward to talking to you this time next week. Let’s hope this US Franc continues to fall here on that account and the other trades they’re ticking along really well as well so hoping to end the week in a really good profitable situation. It makes the weekend even better. Talk to you next week. Bye for now.