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A forex trading plan pulls together market selection, risk rules, and strategy into a single reference you can check before, during, and after every trade — the point is to make as many decisions as possible in advance, while you're calm, rather than in the moment when a position is open and emotions are running.
Market and timeframe selection comes first: which currency pairs you'll trade (usually best to focus on a small handful you know well rather than watching every pair), and which timeframe your setups are based on. Spreading focus across too many pairs and timeframes at once is a common reason beginners struggle to build consistency — it's hard to develop pattern recognition when you're never looking at the same chart twice.
Risk rules come next, and they should be specific numbers, not general intentions: maximum risk per trade as a percentage of account balance, maximum number of trades open at once, and a maximum daily or weekly loss that triggers stopping for the day. These numbers exist specifically to survive the losing streaks that are a normal part of a trading, not because good months don't need them.
Entry and exit criteria are the strategy itself — the specific chart or fundamental conditions that define a valid setup, where the stop-loss goes, and where the take-profit goes (or what conditions signal exiting a winner). The plan is only finished once someone else could read it and place approximately the same trades you would — vague criteria are the most common reason a "plan" fails to actually change behavior once real money is on the line.
This lesson is free — no purchase needed to keep learning.