teriffic school of forex

Undergraduate - Junior Course

  1. Developing Your Own Trading Plan
    1. Seek Professional Advice:
    2. Which Type of Trader Are You?
    3. Create Your Own Trading System
    4. Keeping a Trading Journal
    5. How to Use MetaTrader 4

Developing Your Own Trading Plan

 

Developing your own trading plan is a crucial step for anyone looking to engage in trading, whether in stocks, forex, cryptocurrencies, or any other financial market. A well-thought-out trading plan helps you manage risk, make informed decisions, and maintain discipline in your trading activities. Here's a step-by-step guide on how to develop a trading plan:

  1. Define Your Trading Goals:

    • Determine what you aim to achieve through trading. Are you looking for short-term profits, long-term investments, or a mix of both? Be specific about your financial objectives.

  2. Risk Management:

    • Decide how much capital you are willing to risk on each trade and overall. A common rule of thumb is not to risk more than 1-2% of your trading capital on a single trade.
    • Establish stop-loss orders to limit potential losses.
    • Consider position sizing to control risk. Determine the number of contracts or shares you'll trade based on your risk tolerance.

  3. Trading Strategy:

    • Choose a trading strategy that aligns with your goals and risk tolerance. Strategies can include day trading, swing trading, trend following, or value investing.
    • Develop specific entry and exit criteria for your trades. Your strategy should provide clear signals for when to buy and sell.

  4. Technical and Fundamental Analysis:

    • Decide which analysis methods you will use to identify trading opportunities. This can include technical analysis (chart patterns, indicators) and/or fundamental analysis (economic data, company financials).

  5. Trading Instruments:

    • Determine the financial instruments you'll trade, such as stocks, currencies, commodities, or cryptocurrencies.

  6. Trading Plan Documentation:

    • Write down your trading plan in detail. This should include your trading strategy, risk management rules, and criteria for trade entry and exit.
    • Include a record-keeping system to track your trades, including entry and exit prices, profit or loss, and notes on the trade.

  7. Backtesting:

    • Test your trading strategy on historical data to see how it would have performed in the past. This helps you assess the viability of your strategy.

  8. Continuous Learning and Improvement:

    • Stay informed about market conditions, economic news, and developments in your chosen instruments.
    • Regularly review and update your trading plan to adapt to changing market conditions and improve your strategy based on your trading journal's insights.

  9. Emotional Control and Discipline:

    • Develop the mental discipline to stick to your trading plan, even when emotions are running high. Emotion-driven decisions can lead to losses.
    • Consider using a trading j
    • ournal to analyze your emotional responses and identify areas for improvement.

  10. Risk Capital Allocation:Allocate your trading capital wisely, and do not trade with money you cannot afford to lose.

  11. Contingency Plans:

    • Have contingency plans for unexpected events or market volatility. Know what actions to take in case of adverse scenarios.

  12. Seek Professional Advice:

    • Consider seeking advice from financial professionals or mentors, especially if you are new to trading.

Remember that trading involves risk, and there are no guarantees of profit. Having a well-defined trading plan, discipline, and continuous learning are key to improving your chances of success in the financial markets.

Which Type of Trader Are You?

 

Determining which type of trader you are depends on your trading style, goals, and the time you're willing to commit to trading. There are several common types of traders, and you may identify with one or a combination of these:

  1. Day Trader:

    • Day traders buy and sell financial instruments within the same trading day, often multiple times. They aim to profit from short-term price fluctuations.
    • Day trading requires constant attention to the markets and quick decision-making.

  2. Swing Trader:

    • Swing traders hold positions for a few days to weeks, looking to profit from price swings or trends.
    • They typically perform technical and fundamental analysis to identify entry and exit points.

  3. Position Trader:

    • Position traders have a long-term perspective, holding positions for weeks, months, or even years.
    • They focus on fundamental analysis and macroeconomic factors to make investment decisions.

  4. Scalper:

    • Scalpers aim to make tiny profits from many small trades within a short time frame, often seconds or minutes.
    • Scalping requires high-frequency trading and fast execution.

  5. Algorithmic Trader (Quantitative Trader):

    • Algorithmic traders use automated trading systems and algorithms to execute trades based on predefined criteria.
    • They may rely on quantitative models, technical indicators, or statistical arbitrage strategies.

  6. Positional Trader:

    • Positional traders hold positions for an extended period, usually months to years.
    • They base their trades on a combination of fundamental analysis and long-term trends.

  7. Options Trader:

    • Options traders focus on trading options contracts, which provide the right (but not the obligation) to buy or sell an underlying asset at a specified price.
    • Strategies can range from hedging to speculation.

  8. Forex Trader:

    • Forex traders specialize in trading currency pairs in the foreign exchange market.
    • They may use various strategies, including technical analysis, fundamental analysis, and carry trading.

  9. Cryptocurrency Trader:

    • Cryptocurrency traders buy and sell digital currencies like Bitcoin and Ethereum.
    • They often use technical analysis and closely follow news and developments in the crypto space.

  10. Copy Trader:

    • Copy traders replicate the trades of experienced traders, often through social trading platforms.
    • They don't necessarily have to be experts but rely on the expertise of others.

  11. Investor:

    • Investors have a longer-term horizon and focus on buying and holding assets for potential appreciation over several years or decades.
    • They often allocate their capital to a diversified portfolio of stocks, bonds, real estate, or other assets.

To determine which type of trader you are, consider your trading goals, risk tolerance, time commitment, and preferred trading instruments. It's also possible to evolve and adapt your trading style over time as you gain experience and refine your strategies. Additionally, some traders may incorporate elements from multiple trading styles to create a unique approach that suits their preferences and objectives.

Create Your Own Trading System

Creating your own trading system is a personalized process that involves developing a set of rules and guidelines to guide your trading decisions. A well-defined trading system can help you manage risk, increase the probability of profitable trades, and maintain discipline in the face of market fluctuations. Here are the steps to create your own trading system:

  1. Define Your Trading Goals:

    • Clearly articulate your financial goals, such as your desired return on investment (ROI) and risk tolerance. Your trading system should align with these objectives.

  2. Choose Your Trading Style:

    • Determine your preferred trading style, such as day trading, swing trading, or long-term investing. Your style will influence your time commitment and strategy.

  3. Select Your Trading Instruments:

    • Decide which financial instruments you want to trade, such as stocks, forex, commodities, or cryptocurrencies.

  4. Develop a Trading Strategy:

    • Create a specific strategy that outlines your approach to identifying trade opportunities. Your strategy should include:
      • Entry criteria: Define the conditions that must be met for you to enter a trade. This may involve technical analysis, fundamental analysis, or a combination of both.
      • Exit criteria: Establish rules for when to exit a trade, including profit-taking and stop-loss levels.
      • Risk management: Determine how much capital you are willing to risk on each trade and set appropriate position sizes.
      • Trading timeframes: Specify the timeframes you will trade on (e.g., daily, hourly, or minute charts).

  5. Backtesting:

    • Test your trading strategy on historical data to evaluate its performance. This helps you identify strengths and weaknesses and fine-tune your system.

  6. Set Clear Rules:

    • Develop clear and unambiguous rules for every aspect of your trading, from trade entry and exit to risk management. This helps you avoid emotional decision-making.

  7. Risk Management:

    • Define your risk management rules, including the maximum percentage of your trading capital you are willing to risk on a single trade and your position sizing strategy.

  8. Trading Journal:

    • Maintain a trading journal to record every trade you execute. Include details like entry and exit prices, reasons for the trade, and emotions felt during the trade.

  9. Continuously Monitor and Adjust:

    • Regularly review your trading system's performance and adapt it as needed. Markets change, and what works today may not work in the future.

  10. Psychological Discipline:

    • Develop the mental discipline to stick to your trading rules, even in the face of losses or unexpected market movements.

  11. Stay Informed:

    • Stay updated with relevant news and developments in your chosen markets. Events can impact your trades.

  12. Paper Trading:

    • Before risking real capital, consider practicing your system with paper trading or using a demo account to gain experience without financial risk.

  13. Seek Feedback and Education:

    • Consider seeking feedback from experienced traders and continuously educate yourself to improve your skills and adapt to changing market conditions.

Remember that no trading system guarantees success, and there will always be risks involved in trading. Your trading system should reflect your personal preferences, risk tolerance, and financial goals. It's essential to be patient and realistic about your expectations while continuously refining your system to increase your chances of success over time.

Keeping a Trading Journal

 

1. Choose a Journal Format:

  • Decide whether you want to maintain a physical journal (notebook) or an electronic one (spreadsheet or trading journal software). Electronic journals are often more convenient for data analysis.

2. Record Basic Trade Information:

  • For each trade, include essential details such as:
    • Date and time of the trade
    • Trading instrument (stock, currency pair, cryptocurrency, etc.)
    • Entry price
    • Exit price
    • Trade duration
    • Position size (number of shares or lots)
    • Trading strategy used

3. Document Trade Rationale:

  • Describe the reasons behind each trade. What technical or fundamental analysis led to your decision to enter the trade? This helps you identify patterns in your decision-making process.

4. Set Clear Entry and Exit Criteria:

  • Define the specific conditions that triggered your entry and exit decisions. For example, mention which indicators or signals prompted you to enter the trade and why you chose your exit point.

5. Record Stop-Loss and Take-Profit Levels:

  • Document your predetermined stop-loss and take-profit levels for each trade. Compare these levels with the actual outcomes to evaluate your risk management.

6. Include Emotional Insights:

  • Be honest about your emotions during the trade. Note if you felt fear, greed, or confidence. Understanding your emotional responses can help you improve your discipline.

7. Track Trade Outcome:

  • Record whether the trade was a win, loss, or breakeven. Include the percentage gain or loss, as well as the actual profit or loss in your account's currency.

8. Analyze Trade Performance:

  • Regularly review your journal to identify patterns in your trading behavior and performance. Look for strengths and weaknesses in your strategy and decision-making.

9. Identify Mistakes:

  • Acknowledge and document any mistakes you made during the trade, whether they were related to analysis, execution, or discipline. Note what you could have done differently.

10. Set Goals and Make Improvements: - Based on your analysis, set specific goals for improvement in your trading. Focus on areas where you can enhance your strategy, risk management, or discipline.

11. Regularly Review and Reflect: - Dedicate time for periodic reviews of your trading journal, such as weekly or monthly. This helps you track progress and make adjustments as needed.

12. Maintain Consistency: - Make it a habit to update your trading journal for every trade you take, whether it's a winning or losing trade. Consistency is essential for comprehensive analysis.

13. Share and Seek Feedback: - Consider sharing your journal with a mentor or fellow traders to gain insights and receive constructive feedback.

A well-maintained trading journal can be a valuable tool for traders looking to improve their skills and develop discipline. It helps you learn from your mistakes, refine your strategies, and ultimately become a more successful trader over time.

How to Use MetaTrader 4

MetaTrader 4 (MT4) is a widely used trading platform for trading in various financial markets, including forex, commodities, indices, and cryptocurrencies. It offers a range of tools and features to assist traders in their analysis and execution of trades. Here's a step-by-step guide on how to use MetaTrader 4:

1. Download and Install MT4:

  • Start by downloading MetaTrader 4 from a trusted broker's website or the official MetaQuotes website.
  • Install the platform on your computer or mobile device and launch it.

2. Create or Log in to Your Account:

  • If you already have a trading account with a broker, log in using your account credentials. If not, you can open a demo account to practice trading without risking real money.

3. Explore the MT4 Interface:

  • The MT4 interface consists of several windows and sections:
    • Market Watch: This section displays a list of available instruments for trading.
    • Charts: This is the main area where you view price charts of your selected instruments.
    • Navigator: This panel displays your accounts, indicators, expert advisors (EAs), and custom scripts.
    • Terminal: The terminal displays information about your open positions, account balance, history of trades, and alerts.

4. Add Instruments to Market Watch:

  • Right-click in the Market Watch window and select "Symbols" to add the instruments you want to trade to your watchlist.

5. Analyze Charts:

  • To view a chart for a specific instrument, drag and drop it from the Market Watch onto the chart section.
  • Customize your charts by changing the timeframes (e.g., M1, M5, H1, D1), adding technical indicators, drawing trendlines, and more.

6. Place Orders:

  • To open a new trade, right-click on the chart, select "Trading," and then choose "New Order."
  • In the New Order window, specify the instrument, volume (lot size), stop-loss and take-profit levels, and order type (market or pending).
  • Click "Sell" or "Buy" to execute the trade.

7. Modify and Close Orders:

  • To modify an existing order, right-click on it in the Terminal window and select "Modify or Delete Order." Make the necessary changes and click "Modify."
  • To close an order, right-click on it in the Terminal window and select "Close Order."

8. Use Technical Indicators and Tools:

  • MT4 offers a wide range of technical indicators and drawing tools. You can add them to your charts to aid in your analysis.

9. Set Alerts:

  • You can set price alerts by right-clicking on a chart, selecting "Trading," and then "Alert." Specify the conditions for the alert, and MT4 will notify you when those conditions are met.

10. Access Expert Advisors (EAs): - If you use automated trading strategies (EAs), you can import or develop your own EAs using the MetaEditor tool. Once imported, you can run them on your MT4 platform.

11. Monitor Your Trades: - Keep an eye on your open positions, account balance, and margin levels in the Terminal window.

12. Save Charts and Profiles: - You can save your chart setups and profiles to easily switch between different trading setups.

13. Logout and Exit: - When you're done trading, make sure to log out of your account and close the MT4 platform to ensure the security of your account.

MetaTrader 4 offers a wide range of features and customization options, making it a versatile platform for traders. It's essential to familiarize yourself with its various tools and practice on a demo account before trading with real money to ensure you are comfortable with the platform. Additionally, consult your broker's resources or support for specific details related to their MT4 implementation.