My Personal Trading Plan For Beginners Reviewed by Trading Expert Kim Krompass

Our readers asked for it, and here it is! Our personal Forex trading plan for beginners.

If you stumbled on this article, and you happen to trade Stocks, Options, Crypto, or any other market, this is still relevant to traders of any market. It just happens to be specific to a Forex Trading plan. Comment below if you’d like something specific for YOUR market.

Trading Plan For Beginners: Expert Review

We asked trading expert Kim Krompass from the Price Action Institute to review this trading plan for beginners, search for errors, and edit for improvements. A good trading plan requires critical thinking, and an extra set of eyes so that it can develop into something that is consistently profitable.

We will first show you the plan we developed. After that you see Kim’s comments.  Additionally, please share this article via social media and leave your own comments on my Forex trading plan for beginners in the comments section.

Core Values: Mission Statement

In your mission statement you want to detail the purpose of your trading somthing like the below:

_{My trading goals align with my fundamental life values, aiming for a fulfilled existence dedicated to serving my family and community within my personal sphere.}

This concise statement serves as a constant reminder, ensuring I remain steadfast in my vision. It helps your trading plan have purpose. If you’re trading just to make more money fast, that might not be enough to drive you to become a successful trader.

Foundational Components of the plan:

It is important to know yourself, and to know what you want to get out of your trading.

Take a minute to list your strengths and weaknesses. Be honest, but don’t dwell too much on it, there is always room for improvement. This will help you understand where you’re at and where you want to go.

Also, don’t forget to set your goals. Make a simple list with bite-size achievable goals. And remember these can always be adjusted when you complete one.

Don’t create lists a mile long, if you put too much here you’ll most likely get overwhelmed, put down a couple points for each topic, then move on. Add a maximum of three.

Strengths:

_{My strength is my ability to read the charts and apply technical analysis to help me understand market sentiment.}

Weakness:

_{My weakness is consistently following the plan maintaining the discipline I need to execute my strategy.}

Strategy:

Now, it’s time for the strategy! This is the part that everyone wants to get to. Don’t forget to apply the other stuff, the strategy is good, and helpful, but in order to be successful you need to be a whole trader, understanding all the components.

Step 1: Daily Process

Developing the best and most successful trading strategy is a process and I will go through the same process every day the same way before I make a trade. I will continue to use the same process until I purposely change it based on data that I collect from a consistent trading process

_{I am going to trade Monday through Friday 8 to 8:30 a.m. I’m going to spend 30 minutes a day 5 days a week trading I’m going to be looking at the weekly and daily time frames. I am looking to hold trades for 3 days up to 3 months.  With a target of 300 to 1000 pips and a risk-to-reward of minimum 1 to 1.}

Moving on I will explain the strategy. Remember this is the same step-by-step process that I will apply everyday. This will be a simple strategy since I am only trading for 30 minutes a day.

Step 2: Technical Analysis

My strategy will be using weekly and daily charts to identify the trend. I will apply a trend line trading strategy to determine the direction of the trend that I’m trading. 

Once I find a good trend I will then use support and resistance levels to find a potential entry area. I will also check Fibonacci levels for confirmation. I will also be looking for price action and Candlestick patterns such as pin-bars and engulfing candles to plan my entry.

Step 3: Fundamental Analysis

I will check the news reports daily for a trading advantage and write some notes on where I believe the fundamentals are telling me the instrument will go. Fundamental analysis is critical, but be careful not to go down a rabbit hole, just stick with a couple sources that provide a general sentiment.

Step 4: Plan the Trade

Once everything is lined up I will begin to lay out the actual trade. I will set an entry order or market order at the location where I want to enter the trade. If you don’t have a good entry plan you will fail.

Risk Management:

I am looking for a 1-to-1 minimum risk to reward ratio on my trades with a goal of 3 reward per one risk.  Since these trades are on a large time frame and will take some time to develop I will risk up to 5% per trade. This means my trade target is 15%

With a goal of 15% that means is if I win one trade by hitting my goal I will already have hit my profit target for the quarter.  I will be willing to add positions to the trade. I will add if the price moves in favor or against me.

the conditions I will add:

1. If I get an additional price action signal in my direction.
2. If I hit another support or resistance level.

I will add a total of 3 positions which will equal a total of 5% I will add 3% on the first trade and each additional position will add 1% of risk to the trade.

Stop Loss Movement:

I will lock in profit based on the price action of the daily bar.

Trade Example Below: AUDJPY Long

Technical Note: In the example I have 5 points of confirmation.

Fundamental (2015 Example):

The fundamental outlook for AUD looks to be improving with recent job numbers improving and recent price bounces. Additionally, weak JPY is much coveted by the BOJ and they will be working at making the weak yen if possible.

• Enter at 96.89 with initial TP of 103 = 607 pips.
• If the price looks good at the time I get to TP may extend TP for additional Gains.
• Risk 3% with a stop loss at 90.89 = 604 pips. 
• Add additional 1% with price action or support or resistance areas.

One other bonus for this trade is positive swap on the trade.

Swap Rates Below:

Trading plan for beginners review By Kim Krompass:

~ Kim Krompass of the Price Action Institute  — Follow Kim on Twitter

Trade Plans, like any plans, whether they are for a business or for your personal life all have 3 things in common in order for you to be successful.  They must be:

1. Specific
2. Measurable and
3. Time bound

The Trading Strategy Guides (Casey Stubbs) trade plan has touched on all 3 parts that make goals or plans successful. Before I dive into some of the areas that may be improved, let me first look at what makes a good plan.

What makes a good trading Plan?

Recently, I dined at the famous French Laundry restaurant in Yountville, CA.
If you are unfamiliar with the restaurant, it has been named as one of the Best Restaurants in the world and has a Michelin 3 star rating.  The restaurant has earned numerous awards and accolades in the press and among food critics worldwide.

There were 2 things that struck me about the French Laundry experience. The first was just how well run the business is, and how the world-renown Chefs in the kitchen are following recipes that will guarantee a successful outcome of food. Now whether or not you like the food (and honestly, I didn’t care for a lot of the food) is not the point.

What is the point, however, is that both the operation of the French Laundry and the food preparation follows a 5 step success plan:

1. Vision-the chefs have a beautiful picture of what the food is to look like as it lands on your table and they want your experience in the dining room to be like royalty
2. Sequence- they have an exact sequence of steps to go through for the dining experience
3. Specific Ingredients- they know the exact ingredients they must use to prepare the food
4. Measurement of Actions- they know the specific measurement of each ingredient in each dish they prepare.
5. Deadlines – they know the exact time and temperature they must use to produce such exquisite dishes. There are 2 sittings each night for dinner and you must be on time.

So on to the trading plan For Beginners:

Make Your “Why” Specific

The vision for “why” you trade must be specific. The reason all of us trade is to make money.  Now the “why” of what you want to make the money for should be clearly stated. Just being a good family person is not motivating enough to keep you focused day in and day out, especially when times get hard in the markets.

All traders want to make money.  But again…let’s be specific.

For example:

_{I will make $20,000 trading by December 31st, 20xx in order to take my family on a European vacation in May 2016. Or I will increase my retirement income trading by 10% in 20xx and use it to pay off our mortgage.}

Or:

_{I want to make $1000 a month to save for retirement.}

That’s a simple example of being specific as to how much money you want to make and why you want to make it.

Critique of Casey’s Trading Plan for Beginners:

So in Casey’s plan, he has several areas where he is specific:

• Trading times will be Monday through Friday 8 AM – 8:30 AM.
• 10% profit by the end of the 1st quarter in 2015.
• Risk to reward ratio of 1:1.
• Risk no more than 3% per trade.

This is a good start but there are a few gaps I’d like to address. Like a recipe, I would like to see his vision, his actual sequence of steps, the specific ingredients, the measurable actions and more deadlines.

What would that look like? I might add something like this:

• I will make $500 a month in 2015 trading to help fund my daughter’s college education account.
• I will hunt for my setups Monday through Friday 8 AM – 8:30 AM. 
• I will only take trades or use pending orders to take trades using the 5 confirming signals on a daily/weekly chart.
• I would forget the fundamentals as that is subjective, making it difficult to quantify.
• I will risk no more than 3% per trade and I will only take trades that have a minimum of 1:1 risk to reward.
• At the end of the 1st quarter in 2015, I will review my progress and make any adjustments if needed.

It is simple and straightforward. You know exactly why you are doing what you are doing every day you sit down to look for trades. 

Here are some of the trading conditions you want to avoid in any market.

Conclusion: Trading Plan For Beginners

We want to thank Kim for taking the time to help us become a better trader and to help all of you see the process that you should be going through while developing your personal trading plan. Please share your comments on my plan or on Kim’s comments. I do plan on making some adjustments soon because of Kim’s feedback.

Thank you for reading!

Please leave a comment below if you have any questions about this Forex Trading Plan For Beginners!

Also, please give this plan a 5 star if you enjoyed it!