What is the difference between Forex Trading Plan and Trading Strategy?

Currency trading is full of plan, strategies, and rules which can baffle anyone easily. However, there are significant differences between Forex Trading plan and trading strategy which can be really confusing for the beginners but are a must to understand before they start trading. So before we get into the differences it is pertinent that we know what exactly these two tools stand for and its function.

Forex Trading Plan:

A common trait among all the successful traders is that almost all of them trade with plan. A solid trading plan is the cornerstone of the business. A trading plan is a set of rules which govern how trades will be executed in real time. This rules help in forecasting the market, which means to determine what will happen on the basis of trading system entries and exits. They are a set of comprehensive documents, which even include trading strategy. A trading plan acts as a cover to the weakness of the trader and helps him gain profits by following it. As it’s famously said, “A goal without a plan is just a wish.”

Forex Trading Strategy:

Trading strategy is simply a collection of rules which help to determine when to enter and exit the market. There is no fix strategy and it can vary with the market as the market is highly volatile. What worked for you today might not work tomorrow, so you need to stay updated and keep adapting your strategy with the change in the market environment.

Difference between Forex Trading Plan and Trading Strategy:

With the above being discussed, we know how immensely important is it for one to have a proper plan and strategy. Trading strategies and trading plans are both works in progress in that they are constantly being tweaked and evaluated.