Do not over trade.Never Risk More Than 2% per Trade
Never risk more than 2% per trade.It is most violated rule by new traders.You must also set your daily loss limit.Some brokers like dukascopy has account protection system where you can set your loss limit.This will close all your open positions once the limit is breached.Once you have lost your daily limit stop trading for rest of the day.Go out relax.Remember there is always another opportunity in the forex market.
Never Let a Win Turn Into a Loss
Always use STOP LOSS.Using trailing stop is a good habit.Another method of locking in gains involves trading more than positions having different take profit levels.Say one level is 25 pips and another is 50 pips.It is always a good idea to use trailing stop.
Enter Fundamentally and Exit Technically
Both methods are important and can impact price action.We must understand the benefit of each and when to use them. Fundamental analysis are good to analyze the broad themes in the market, while technical analysis are useful for identifying entry and exit levels.
Be patient,Do not hurry
In forex,,right timing plays a crucial role.Even if your analysis is right but you open a position in wrong time it will be futile.If market goes against you,believe your eyes and exit.Never try to fight with market.
Never add to a losing position
One of the biggest mistakes that new traders make is to keep adding to a losing position,they think that market will reverse.Ultimately,they end up with heavy loss or margin call.Most people loose because they cannot see profits running and close them on little profit.But if a position is in loss,they keep adding to it.We must close losing position as early as possible and hold winning position with help of trailing stop after breakeven or initial 10-20 pips profit.
Never believe any strategy/Ea blindly
New traders are attracted to many Expert advisers (Trading Robot) available in market showing a very impressive backtest.Use your common sense,if they can make such good profit why they will sell they for few hundred dollars..? I will never sell it for it will be like money printing machine for me.Some strategies are indeed good but remember,Forex market never follows and mathematical rule.
Trade by Logic, Impulse Kills
Most of new traders buy when a pair has come down and sell once it goes up.This is basically swing trading.They think if a pair is up, it is bound to come down and vice versa.But this is not always valid.Ultimately,hey end up loosing all profits they made previously.It is good to wait for a reversal signal.They may loose some pips if they enter late,but they can make good pips after reversal signal too.Remember,money saved is money earned.
Always Stick to your Plans
Always enter the market with a plan and a stop loss.Do not let your emotions change your stop loss or divert from your plan on "HOPE" that market will move in your favor after sometime.And if you find it difficult to control emotions,leave trading desk,go outside and try to divert your mind somewhere else for sometime.
Thanks for reading.
Trade Safe !!