Trading the Forex market can be a tricky ‘game’, and like any game you’d need a strategy or a bunch of guidelines or rules to play to win every time. Well, I found these five top rules, among many others, that have aided me in my journey so far.
- Don’t be Greedy
While trading can make money and a lot of money with various moves in the markets, and the fact that the Forex market alone is worth trillions of dollars doesn’t mean that you are guaranteed to be successful on every trade.
Therefore you should know the number of trades you are willing to take per day and stick to that number.
- No emotional trading
Making losses is not fun and can be demoralizing when you make constant ones, and on the other hand, a new trader who’s been constantly making profits might get cocky and over trade and give all their profits back to the market. And in both scenarios, emotions led to said the detriment.
- Stick to your strategy
Don’t be reckless with your money, know that with every trade you’re risking a certain amount of your account every time. And if you veer from your strategy you’re only giving yourself exposure which probably will not turn out successful.
- A best offense is a good defense
While one of the main goals traders do what they do is to make money from the markets, they also would like to safeguard their accounts and avoid negative balances. So, that being said it’s not always that one has to be in the market, in fact it’s better to be out than in, and be making losses and regretting your decision. Instead learn the art of paper trading. It boosts confidence and also gets you used to not being so hasty to get into the market.
- Detach from the outcome
Once you’ve taken a trade it’s best to not sit and just monitor the charts waiting for your trade to turn profitable, because that’s where the emotions come in.
You’ve already done your analysis, and you’ve set your stop loss and take profit. Check in time and again but don’t just sit watching the market endlessly. Emotions will take over and reason and logic will sooner be out the door.
Now while all the above is my experience so far… it’s not to say yours will be the same. This is just my opinion and yours could be different. Ultimately your trading style and ways are up to you.
By Charles – Alumni Student