Joshua K362 O’Neil

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What is a trading plan in forex and why is it critical?

A trading plan outlines entry rules, exit rules, risk limits, and psychological guidelines. Institutions mandate trading plans for accountability and consistency. Retail traders often neglect formal plans, leading to impulsive decisions. Benefits: structure, discipline, and objective evaluation. Risks: without a plan, traders react emotionally, leading to inconsistency. A strong plan should define position sizing, risk per trade, acceptable drawdown, and trade review processes. It acts like a business plan—ensuring forex trading is treated as a professional endeavor, not gambling. Plans evolve with experience, but having one is the difference between systematic growth and chaos.