Without a plan you are setting yourself up for failure

DOUMA PIPS
Building a Trading Plan
Copyright © 2018 by Douma Pips.

All rights reserved. Printed in the United States of America. No part of this book may be
used or reproduced in any manner whatsoever without written permission except in the case
of brief quotations embodied in critical articles or reviews.
This book is a work of fiction. Names, characters, businesses, organiza- tions, places, events
and incidents either are the product of the author’s imagination or are used fictitiously. Any
resemblance to actual persons, living or dead, events, or locales is entirely coincidental.

For information contact :

Douma Pips
https://www.instagram.com/doumapips/

Book and Cover design by Douma Pips

ISBN: 123456789

First Edition: March 2018

10 9 8 7 6 5 4 3 2 1
 CONTENTS
BUILDING A TRADING PLAN..............................................................................I

PLAN TO WIN .................................................................................................. 1

THE STRUGGLE IS REAL .................................................................................... 4

WHO AM I?...................................................................................................... 6

STRENGTHS & WEAKNESSES .......................................................................... 11

FOREX IS MY J.O.B. ........................................................................................ 14

EATING AN ELEPHANT ................................................................................... 16

RISKY BUSINESS ............................................................................................. 23

I CHOOSE YOU ............................................................................................... 25

FINALLY A STRATEGY ..................................................................................... 27

WHERE TO NOW? .......................................................................................... 29

ABOUT THE AUTHOR ..................................................................................... 32

ACKNOWLEDGMENTS.................................................................................... 33
“By failing to prepare, you are preparing to fail.” —Benjamin
Franklin

M
ost traders simply don’t have a plan because they
don’t take trading seriously enough to warrant one.
They are known as dabblers and they are most likely
to lose everything and quit then blame trading as the biggest scam
they have ever seen.
Social media makes trading very desirable with the promise of
financial freedom and living the life of a Hollywood star. The moto
“$99 a month for all this is a bargain!” Guess what they don’t tell
you? Being profitable trading Forex is hard work and a slow process.
To them all you are is another sucker monthly subscriber and
someone new to hedge a trade against. No wonder people call Forex
a SCAM.

Figure 1 Expectations

Figure 2 Reality

2
 Trading without a plan is the same as not having a budget. Not
knowing where your funds are or how to improve your finances only
leaves you spending everything you have made until the next pay
cheque comes. On the other hand someone with a budget knows
exactly what to expect and how to improve and become even better
with their money.
Let’s get serious for a moment. If you want to make trading a
career path I suggest you take a step back and review your trading
plan. Not just once, but periodically. Without a trading plan you’re
just asking for trouble! Having one and not reviewing you’re not
growing! It isn’t just a template you refer to, but a living document
that grows organically as you evolve.

“VISION without ACTION is merely a DREAM.

ACTION without VISION just passes the TIME.
VISION with ACTION can CHANGE THE WORLD” – Joel
A. Barker

Having clear goals defined by your trading plan you know you
have to work within certain boundaries. Knowing what you have to
do helps build focus and discipline. Grey areas don’t exist in a
trading plan so it helps eliminate emotional trading. The key to
successful traders is having a clear plan to reach your goals.

3
“Money in the bank is like toothpaste in the tube. Easy to
take out, hard to put back in.” —Earl Wilson

T
rading isn’t easy. In fact, trading will be the most
difficult thing you do in your life if you choose to go
down this path. In my experience I have personally seen
the following:
 Losing close friends and family.
 Suffering from emotional stress.
 Questioning your intelligence.
 Depression.
 Fear and Greed.
 Constantly defending what you do and how trading is not
gambling.
 Losing large amounts of money in short periods of time.

The negativity that comes from trading can compound and put
you in a dark spot. It will make you question your beliefs and “If all
this is worth it”. Trading is FUCKING HARD and you should
show respect to any trader out there trying to make it work.
On the other hand, trading is the most rewarding thing you can
do. It is the biggest contributing factor in self-discovery, financial
freedom and mindset growth. The hard work pays off. I promise,
but you need to put in the work.

 Surrounding yourself with like-minded individuals (later

becoming your support network since you no longer have
friends).
 Growing as a person and your ability to understand others.
 Emotionally strong.
 Financial freedom (1 trade can equal a yearly wage for some
people).
 Finding out your true self and what you can offer to the
world.
 Discipline and increased focus.

There is a deep correlation between Forex trading and your

personality. You build a style based on your personality. Your
personality builds your ideal trading plan. Every time you review
your plan always ask yourself. “Does this resonate with me?”

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 “I am who I am. Not who you think I am. Not who you
want me to be. I am ME!”

E
veryone is different and the only person I should really
be focusing on is myself. There is no point comparing
how you trade against another person or even comparing
your results. It just doesn’t matter!
The only thing that matters is you are growing and making
progress daily. You are only in a competition against yourself and
every day you grow you are winning.

SO HOW DOES THAT HELP

BUILD A PLAN?

Before you can build a solid plan you need to know your
personality and your current situation. Knowing this will help build
solid foundations for your trading plan.

Personality

Go on a self-discovery and figure out your personality traits.

Knowledge is power, so go and ask yourself the following:
 How much risk can you take? Your risk management
strategy.
 Are you a positive or negative person? Social media could
affect you emotionally and cause emotional trading.
 Are you patient? Determines if you wait for entries to come
to you or you go chasing. Swing vs Scalp.
 Do negative numbers scare you? This controls your pain
points during times of drawdown.
 Are you process driven? Process driven people will follow
steps with military precision and execute within the bounds
of the rules. Discretionary trading need not apply.
 Are you a social butterfly? The lust for e-fame might get
the better of you and you start trading demo, faking results
just to please others around you. You are not trading for
yourself, but for others.

Situation

Hopefully, you know a bit more about yourself. Now you need
to look at your current situation. We are all at different stages of our

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lives and knowing where we allow us to build in discipline and focus
on the trading plan.
 Do you have a family?
 Are you studying?
 Do you work full time?
 Are you deep in debt?
 Do you have savings?
 What if trading didn’t work for you?
 Do you have a long-term goal?
 Is trading just for fun?

Everyone’s situation is different and no one trader is the same as

another. By knowing what makes you tick and your current
situation will change your approach to trading dramatically.

Situation 1

You’re working full time with a wife and two kids. You have a
mortgage to pay and have some credit card debt and car loan. You’re
living comfortably (not living pay cheque to pay cheque) and have
some savings.
Your approach to forex might be trading one session for a few
hours as a part-time job. This allows you to spend quality time with
the family and set expectations that you’ll be working your part-time
job for a few hours each day. If forex didn’t work out you would still
be able to maintain your current lifestyle. Trading is a means to
supplement your income.

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 Situation 2

You are studying and living at home. You work a part-time job
and have no savings as you spend as fast as you can earn. Your
expenses are just your mobile bill and some fast food.
You would have come to trading from seeing social media and
promises of making big money (Lamborghini, houses, private jets,
hot chicks) while working from home. You will follow anyone that
makes a promise and aren’t committed to the long game. You are
arrogant and want to flip $100 1 million in the shortest amount of
time possible and brag about it online. You only dabble in trading
and make the excuse you aren’t gambling because you have a strategy
and others have done it.

Situation 3

You work a full-time job, but sick of the rat race and want to
do something meaningful with your life. You are newly married and
currently renting. You have savings for a house deposit and have
excess money to spend.
Working the rat race makes you angry that you are a slave to
the system. You are determined to do what it takes to leave the rat
race. You found trading because you are looking at other ways to
replace your income and provide you with more freedom. You treat
trading as a job and have clear goals on what you want out of it. You
understand the long game and it takes a long time to master things.

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You have the time and effort to make trading work for you no
matter what it takes.

What is your situation?

Do you fall under any of these situations? Most likely you’ll

have your own with your own reasons as to why you trade forex.
The most important lesson here is to find out your personality and
current situation and build your plan around this.

“Your trading plan is an organic document that will grow and

change with you.”

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 “Believe in yourself. Our strength grows out of our
weakness.” – Ralph Waldo Emerson

K
nowing what you excel at and stumble at is your biggest
asset. Most people lie to themselves and proclaim they
don’t have any weaknesses or choose a weakness they
can easily turn into a strength.
We all like to gloat at what we are good at, but being creatures
of comfort we need to reflect and be completely honest with
ourselves what are true weaknesses are. What’s the point in lying to
yourself? If you want to grow as a person you need to be brutally
honest. If you can’t find the courage to do this ask a friend to be
brutally honest in identifying your weaknesses. I’m sure you’ll find a
few with an opinion.
How do you overcome fears? You face them head-on. It is no
different to overcoming your weaknesses. A simple process I use is
the compliment sandwich.

THE COMPLIMENT
SANDWICH

1. Identify a strength you have.

2. Identify a weakness you have. Be truthful.
3. Turn the weakness into a strength. Turn the frown upside
down.

Identifying your strength puts you in a positive mindset. Then

finding a weakness brings you back down (at worse case back to
being balanced). Now the fun begins as you figure out how you can
turn this weakness into a strength. It’s a win-win because you not
only conquer a weakness, but you also added a new strength. Here
are some examples I have used in the past.

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 First sandwich

1. Analysis of the market conditions using pure price action.

Naked charts are beautiful.
2. Entering a trade too early due to fear of missing out
(FOMO).
3. Be patient and wait for candle closes. Provides you with
additional confluence and confirmation of your trade.

Second sandwich

1. Accepting risk and losses when placing a trade. No moving of

stop losses once the trade is entered.
2. Not letting runners, run. Fear of * losing* out on too much
profit. This makes me move SL to secure pips.
3. Remind me that this is just bonus/house money. Any profit
made is a bonus. Look to move SL behind structure or areas of key
interest such as zones, wicks or S/R lines.

Now you have a process of finding out your strengths and

weaknesses and how to overcome them. You just have to keep
repeating the process until you run out of weaknesses.

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 “Ask any trader… Any successful trader. Dabbling in
forex will never make you successful. Taking it seriously
will.”

I
f you treat trading as an actual job you will be much more
successful at it. You’ll allocate a portion of your time where
you start and end your shift, have daily targets to hit and
have regular performance reviews. If you want a pay rise what do you
do? You work hard, smash targets and have glowing reviews.
By simply treating Forex as a JOB you have already changed
your mindset on how you approach it. You even have the ability to
leave early for the day if you hit your daily goals in the first 5
minutes of your shift. Who doesn’t like that!
By allocating time to your forex JOB you are allowing yourself
to be focused during this time and take things. SERIOUSLY
shifting your mindset to be serious makes you sharper and more
focused on becoming the best.
So are you really treating Forex as a job or are you dabbling
with the illusion of telling yourself that Forex is a job?

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 “You have one life. Set BIGGER goals.”

I
f you don’t know where you’re going, you’ll just end up
somewhere else. It is important to set big goals because
failing to reach a big goal is better than achieving a small
goal.
When setting goals it needs to be SMART.

 Specific: Goals must call for specific actions or events to be

successfully met and no longer than a couple of sentences to
establish what, where and why.
 Measurable: They need to describe how each result will be
measured. “How can I measure my success?”
 Achievable: They must be achievable. A doctor can’t simply
be a doctor without going to medical school. “Is the goal
achievable with the current resources available to you now?”
  Realistic: Goals should be reasonable. Ask yourself “Is this
possible?” They are supposed to challenge us, not defeat you
before you start.
 Timely: Must have measurable milestones where there are
reviews and dates for assessment. Open-ended goals will
often fail because you failed to set dates to review, measure
and revise.

BREAKING IT DOWN - REAL

WORLD EXAMPLE

Goal

Replace your monthly income of $10,000 a month with profits

made from forex within 12 months.

The Big Picture

Now that you have a clear goal with a deadline lets break things
down into smaller chunks which are achievable. We start with
monthly targets and work from the top down.

Target - $10,000 per month

Your target is really far in the distance, but not out of sight.
Break down your journey into smaller milestones to help keep you
on track and allow you to celebrate the small wins along the way.

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  @ 12 months $10,000 per month
 @ 6 months $5,000 per month
 @ 3 months $2,500 per month
 @ 2 months $1,250 per month
 @ 1 month $625 per month

So our immediate goal for the first month is to make $625

profit to remain on track. How do we achieve this? We continue to
break it down to the smallest piece.

First Milestone- Earn $625 this month

Assuming this month has 4 weeks and you trade 5 times a

week.
 @ 1 week $156.25 per week
 @ Per trade (assuming 5 trades) $31.25 per trade

We now have the smallest piece of the puzzle for us to hit our
first milestone. We know we have to make $31.25 per trade
consistently for the next month (20 trades). What is the scenario we
must create to make this happen? Let's break it down into positions.

Knowing is half the battle

Knowing how much profit per trade is required we piece

together a few options to see what would work for consistently on
every trade to achieve this goal. (We are not taking compounding

18
into consideration as our plan is just focusing on the profits made
per month).

Option 1

 Account balance: $100

 Lot size: 0.01
 Risk: 1%
 Standard Pips Required: 315 (~$31.50)
 Notes: This is not achievable on a consistent basis as the
market doesn’t give out this around of pips on a daily basis.

Option 2

 Account balance: $100

 Lot size: 0.05
 Risk: 5%
 Standard Pips Required: 63 (~$31.50)
 Notes: This is achievable, but takes a lot of effort to achieve.
You are looking at over 30% returns per trade.

Option 3

 Account balance: $500

 Lot size: 0.05
 Risk: 1%
 Standard Pips Required: 63 (~$31.50)
 Notes: This is the same as option 2 just with a larger

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 account. This just uses a larger account with the smaller
amount of risk.

Option 4

 Account balance: $1000

 Lot size: 0.1
 Risk: 1% Standard Pips Required: 32 (~$32.00)
 Notes: This is an ideal option. The market can provide this
level of pips and you are keeping your risk exposure on the
lower end of the scale.

Option 5

 Account balance: $1000

 Lot size: 0.5
 Risk: 5%
 Standard Pips Required: 7 (~$35.00)
 Notes: Using higher risk you don’t have to work as hard.
This can compound exponentially as you only need a small
number of pips to hit the target. One trade here with a
target of 35 pips would mean you hit your weekly goal in
one trade.

As you can tell you have lots of options, but you need to
understand what is realistic and what isn’t. Your exposure of risk
plays a big role in your position sizing also. The three main

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components to achieving your goal are to: Increase your capital.
Increase your risk. Increase your pip requirement.

CELEBRATE GOOD TIMES.

COME ON!

Be sure to celebrate your wins so it provides you with

momentum in achieving your next milestone. Just repeat the process
above and work out what needs to be done to reach the next goal.
Before you know it you would have reached your goal and be sitting
down planning out your next big goal.

BONUS - WDL

If that all seems too hard here is a quick and dirty solution
which was discussed in “The Signs” webinar by WDL.

 Start small at making $200 a week ($40 per day) for three
months (your consistent baby!).
 Once you’ve done this look at making $500 a week for the
next quarter.
 Then $2000 a week for the quarter after.

So in 9 months, you should be making $400 per day (Assuming

5 days of trading) $2,000 per week … $8,000 a month … $96,000 a

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year! It doesn’t take much to earn a decent salary.

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 “Risk comes from not knowing what you’re doing.” –
Warren Buffet

A
s a trader, you should do whatever it takes to avoid a
margin call on your account. Margin calls only occur
when you don’t use risk management as part of your
plan.
As a trader, our goal is to be profitable. If that means banking
$1, $10, $100 or a million. We want to lock in profits and never give
back what we have taken back to the market. With strong risk
management, it will allow you to trade confidently knowing how
much you are willing to lose on the trade and not succumb to fear
and hold onto hope when a trade goes against you.
Everyone speaks of a daily target (percent or dollar value), but
no one really talks about your daily loss target. The key to being
successful is to know where you stop and entry is before you actually
enter the trade. You should always ask yourself. “If this trade goes
against me, will I be happy to lose x dollars/percent?”
Never fall into the trap of letting your emotions getting to you.
Once you start trading emotionally things will turn south quickly
and your risk management is one of the first things to go and
revenge trading takes its place as a priority.
Have you ever placed a trade then move your stop loss as the
position is moving against you? You keep telling yourself “Oh it
should be behind this structure… Actually behind this one.” This
vicious cycle continues as your fears continue to grow and “hope”
takes over. Before you know it you no longer have a stop loss and
you are margin called.
Trade smart and don’t be an idiot. Follow your plan and leave
the emotions at the door. You are here to make money consistently.

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 “It’s not only one thing. It’s ONE THING at a time.” –
Gary Keller

I
n forex, there are lots of pairs to trade, Majors, crosses,
exotics, cryptos, indexes, commodities, etc. You can trade
anything under the sun, but most successful traders don’t.
Have you ever seen how graceful professional dancers are on the
stage? They move so elegantly, so gracefully. They are in sync and in
harmony with each other as they breathe and move as one.
They achieve this by spending lots of time with each other and
getting to know each other's habits. They know each other's
weaknesses and strengths and have practiced so many times that
they could perform the routine unconsciously.
Trading is the same! The more time you spend with a pair the
more you will understand how it moves and why it moves. You
know when to leave the pair alone and when to treat it aggressively.

Example

 Gold trends hard and keeps on trending after periods of

consolidation.
 Gold moves the most in New York.
 Engulfing patterns on the 15m time frame is a good reversal
indicator when there is a volume in the market.

For you to be a successful trader you need to narrow your focus

and learn to master your pair. Think of the pair you chose as your
dancing partner. The more time you spend with it the more
synergized you will be. You’ll know the habits of when to stay out
and when to attack. You’ll learn how to unconsciously take trades
when you see the signs.

“It’s not a matter of IF you’ll make it. It will be a matter of

WHEN!”

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 “Investors should remember that their scorecard is not
computed using Olympic diving methods. The degree of
difficulty doesn’t count.” – Warren Buffet

T
rading should be easy and so should your setups. By
now you should know what your personality is like,
what your style is and the pair and session you’re going
to trade. So all you need now is how to trade.
The simpler the setup the more profitable it would be in the
long term. Anyone can do analysis, but only few can execute
correctly. The number one reason for poor entries is hesitation.
 Here are some basic rules to use as a framework when creating
your strategies.

 Trade the trend.

 Trade momentum.
 Trade volume.
 Be patient and let the market come to your setup.
 Have a decent strike rate > 60%.
 Don’t trade directly into Support and Resistance.
 Simplify your strategy and stick to it.
 It’s your strategy. Stick to it.
 The market has lots of entries. You don’t need to catch
them all.
 Leave the emotions at the door.
 Follow your plan!
 Build a habit. It takes 2 to 4 weeks to build one.

There is no ultimate trading strategy. Just one you have created

with hard work and dedication.

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 “A little progress each day adds up to big results.”

T
he only way you can measure progress is to document it.
Without historical data, you don’t know where you
came from and don’t know how to progress.
With trading, you need to keep a journal. This will help
identify your weaknesses, poor entries, good entries and if you stuck
to your plan. Constant reviewing of your trades will help you quickly
correct mistakes you are taking and either eliminate bad trades or
make good trades better.
The biggest issue in becoming a consistently profitable trader is
the number of losses you take and your inability to correct this.
Most people are satisfied with 1 win so they the break their plans
and overtrade.

Example

 You have a daily goal of 2% a day and only taking three

trades a day.
 On your first trade you made 1% and the second trade you
made an additional 1%. This puts you up 2% for the day.
Congratulations you’ve hit your daily goal.
 Your plan says you take three trades a day and you take
another trade. This time you lose 1%.

If you had stopped after hitting your daily goal you would have
finished the day at +2%, but instead, you ignored your daily goal
and overtraded. You are now finishing the day at +1%. This is a
good result, but overtrading hurt your overall profits.

Making money is hard. Losing it is easy.

Don’t let over trading eat your profits. Reviewing the journal
you should focus on the following:

 Number of trades match your plan.

 Wins vs losses.
 Entries and exits.
 Constantly asking how you could improve your trades.

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 Repeating the process religiously.
 Time of the trade.
 Your emotional state.
 What lesson did you get from the trade?

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Douma Pips is a small group of like-minded traders that have come
together looking to improve our knowledge of trading and become
successful traders.
Each member in the group have come from different
backgrounds and different forex educations, but one thing that
keeps us focused and motivated is the wiliness to share, support and
learn all aspects of trading.
A special thanks to Rakeel (Wicks Don’t Lie) for releasing “The
Signs”. This was the driving force that inspired this book to be
written.

Uncle Ted and all the mentors at Forex family to introducing us to

a new way of trading forex and achieving success.

Infinite Prosperity for the financial lessons and lessons on how to

control the emotional game.

And lastly a special thanks to the Douma Pips family. Without the
support and guidance of the guys and girls in this group none of this
would have been possible.
Thanks for reading! Please let me know what you thought!