Just like any other business Forex trading has rules that must be adhered to in order for you to be successful. What follows is a list of important, "must do's" for profitable Forex trading.
Controlling your risk is without a doubt one of the most important things you can do in order to become a profitable trader. It's pretty obvious that without risk control it does not take much time for your account balance to go to zero. Risk control should be designed to keep you in the game during those particularly difficult times when your chosen Forex strategy is not reading the market in exactly the way that it should.
Understand the mechanics of trading. It really does not matter whether you are a manual trader or one who uses an automated Forex trading robot. You need to understand how things work and how trades are placed. This is important because you need to minimize your mistakes as any mistake could be potentially costly.
Instantly correct any mistake you make. We're all human and we are subject to make mistakes from time to time. If you happen to click on the "buy" button in your trading platform, but mean to click on the "sell" button, get out of the incorrect long trade immediately. Many beginning traders will make the fatal mistake of waiting to see what the trade does rather than correcting the mistake and following their system to the letter.
Do not abandon a strategy that is working. This may seem obvious to you at first glance, but you would be surprised at how many new traders are only happy chasing the latest, greatest Forex strategy.
Do what your trading system tells you to do. It seems in the world of foreign exchange that following instructions is one of the most difficult thing for beginning traders to do. By not following your system's instructions you are both leaving money on the table as well is throwing good money away.
Learn to take losses. At first glance this might seem like I'm asking you to, "be a loser". That is not what I'm saying at all. What I am saying is that since losses are a natural part of trading it's best not to be freaked out by them. Keep in mind that even the very best strategies will experience losses.
Do not expect miracles. The world of trading is full of bright-eyed, bushy tail beginners who are unfortunately being led to believe that anyone can get rich just by trading on the foreign exchange. This is not meant to sound negative, it's meant to be realistic … and that is what you must be if you plan to succeed. Remember that there is no such thing as a successful trader with unrealistic expectations.
Remember that the market is always right. You're setting yourself up for disappointment if you just do not accept the fact that the price is what the price is. You should never make statements such as, "I can not believe the market went down when I was long, it should have gone up". Such statements will only lead to more frustration and may even make you give up on a perfectly good Forex strategy.
Take a break from the markets. You do not have to be glued in front of the screen 24 hours a day to be a successful trader. Taking a break from the markets from time to time is not only helpful, but may help you become a better trader. I'm not talking about taking a break from markets when you should be trading, I'm talking about moving away from the computer screen and even removing the markets from your mind. This will give you more balance in your life and will help you to keep from getting burned out as a trader.
Never stop learning. If you know anyone who has, "mastered" something you know that their education in their chosen field of study is an ongoing process. Grow your knowledge and skill and you will grow your equity.
What we have just covered are some absolute essentials for anyone looking to become successful in the wonderful world of Forex trading. Look over these from time to time to help keep yourself grounded and focused on your goal of long-term, lasting success.
Source by Richard M. Davieess