The Rules of Trading Forex

I was going to call this "Forex Trading Tips" but usually that means taking the suggestions lightly.  I wanted this to be something you could strongly use to build your business on.  That's why they are called the Rules of Forex Trading because I feel if these if followed consistently, will make you successful. 

It doesn't matter if you are a new or a seasoned trader, You should have a set of trading rules to follow in order to be successful. There is no way with any degree of certainty to be able to predict with 100% accuracy the Forex Market.  For that reason and that alone you should become 100% commited to rules which are certain for yourself. 

You can become certain with your skills, strategies and tools at your disposal once these are mastered. The way to master these is to place certain rules upon yourself which will guarantee that you will not be the cause of mistakes and losses.

Here I will provide you with some Forex Rules to keep you aligned in the direction that assures profits in trading foreign cuuencies. The following are my seven best Forex trading rules.

1. Trade the Market, Don't Gamble.

Trading is a function of doing research and gathering knowledge, this could be your's or a advisor that you trust. Trading without these, based on "hunches" or "a whim" is gambling. Gambling should be done for fun, on games of chance, not with your Forex account.

2. Do not use "Real Money" until you've practiced with "Play Money".

In Forex Trading it's easy to setup a "demo' account. This allows you to trade as if it is real, winning and losing trades but there is no real cash being used. This allows you to make mistakes and learn from the experience. My advise, trade on a demo account until you feel you are ready to enter the real world of trading, reinforce your skills, your strategies. Use your demo account to analyze your wins and losses, learn from the mistakes so that you don't repeat them with real money.

3. Consider the Amount of Time you Actually Trade.

Many New traders fall victim to trading in small lots of time. 15 minutes here, 15 minutes there because they love the excitment of making trades at the right moment to catch a price before it moves. You are better suited to look at longer time frames that provide the opportunity for analysis which in the long term will make for better trading.

4. Newbies should Always go with the Trend.

There might be the temptation to make the trade against the trend but as a general rule you should trade with the trend. You are always taking a chance going against it.

5. Look at other time frames other then the ones you always trade in.

It is good after a certain period of time to form habits which end up producing consistent profits. This may mean spending an hour a day in efficient research and trading for some. While other may need more time. You will after some time develop your own time frame. My advise is to put some time into looking at the bigger picture. Look at the overall trends and do analysis there. This can give you a better chance of accurately identifying upcoming trends.

6. Develop Solid Money Management Skills.

Understand that in Forex Trading you will experiences losses. Your objective must be to have a strategy to compinsate for those losses. You must establish a certain percentage you can lose for each losing trade and then realize how much must be won to compensate. You cannot leave this to chance. For example, you can risk 3% of you trading account for each loss. You then need to know that you will need to have twice that amount to make that up. Keep your risk low so that a few losing trades do not wipe out your account.

7. Lose the emotions, Not your Money.

This might be my most impoortant rule. Emotions are probably to biggest cause of death of the careers of many Forex traders. Treat this as a business where everything is planned. Corporations are not run by emotion and your Forex business should not be either. Do not use hunches or feelings, but do use the tools available to you for technical and/or fundamental analysis. Make your trading decisions based on these, get you out of the picture.

Bottomline, there is so much to learn and you should always be willing to learn more and more as you move ahead in this evciting world of Forex Trading. The resources recommended on this website are invaluable and have helped many become successful in Forex trading over the long term.

Proven Forex Strategy for Winning Trades