Sunday, January 4, 2009
The Principle of ' P3R ' in currency trading.
Many of the highly successful currency traders have acquired their skills through self development and relative minimum of guidance from senior traders.In these situations we can break-down their learning activities into four compartments that can be called 'P3R' prepare,plan,perform and review.'Prepare' refers to activities that orient the performer to the upcoming challenge.Reviewing charts and market data prepares a currency trader for the upcoming trading sessin..'Plan' relies on the assessment of strengths and weaknessess to guide how the performance will be undertaken.A currency traders plan includes the patterns he or she will trade, the capital to be allocated to trades,allowable risk etc.'Perform' is the execution of the plan with mid-course currection as needed.A currency trader may reassess a plan in the light of unexpected economic news and a price break-out.'Review' comes after performance as part of assessing what was done right or wrong.A currency trader utilizes review to identify flaws in trading plans and the execution of those plans, using the feed back to begin a new cycle of 'P3R'.Trading journals are a timebound tool for self mentoring, structuring and documenting 'P3R' process.How does your P & L break-down as a function of a day in a week?Do you make or lose more money in a particular day compared to other days? You must keep the size of the losers much smaller than the average winners to make your system profitable.Good trading to my readers. Muraleedharan http://forexcentral.googlepages.com