It is mandatory to have a plan when trading the currency markets, because foreign exchange markets are full with fake moves, designed only to take out weak bulls/bears, and after you are stopped out, the market just comes to its senses and goes in the initial direction. But without you because you were stopped out.
I hear so much about traders who keep their technical analysis charts secret and their bullishness/bearishness bias secret as well. There is nothing more inaccurate. From my experience, human nature is designed is such a way, that even if you tell somebody that we should stay long/short for this and that reason, and even if you present your technical and fundamental arguments for it, you will still be second guessed because there is always another argument to debate your initial statement. But then again, that’s the beauty of trading, somebody has to be on the other side of the trade. So I don’t mind sharing.
I strongly recommend to have a plan when trading. A medium to long term one. For example, you are bull on the eurusd pair. And your target is something like 1000 pips higher than the current price but according to your technical analysis and sustained by fundamentals, price should go at that target. Now, in trading there is nothing like a vertical line, price, even if it advances, like our example says, it will not do so in a straight line, but with ups and downs, corrections and impulsive moves. So if you are a bull, then look to buy the dips for specified targets. Keep in mind currency markets are tricky and fake moves are all over the place. Sticking to your plan might save you from being burned or having a margin call on your account.
When your target is being reached, don’t go short. Look first for reversal patterns like head and shoulders, double tops and bottoms, wedges, etc, and act second. Wait for confirmation, do not hurry, because tomorrow is a trading day too.
And of course while doing all the above, don’t forget about money management. You may be right about your price target, but the way the currency pair is getting there may kick you out as easy as nothing, and in this case your safety net is called money management. But more about this on the next chapter.