Forex Trading Rules

When you trade in Forex there are some rules you must follow in order to avoid risks and make money.

1. Never let a winner turn into a loser: Forex moves quickly, with gains turning into losses in a matter of minutes, so you need to manage your capital.


2. Logic Wins; Impulse Kills: Focused traders will know how to limit their losses, while impulsive traders are never more than one trade away from total bankruptcy.


3. Never Risk more than 2% per Trade: This is the most common and violated rule in Forex.


4. Use both technical and Fundamental Analysis: Both methods are important.


5. Always Pair Strong with Weaks: Is one of the best ways for traders to gain an edge in the currency market.


6. Being Right and Early Means you are Wrong: Successful directional trades not only need to be right in analysis, but they also need to be right in timing as well.


7. Differentiate Between Scaling In And Adding To A Loser: Adding to a losing position that has gone beyond the point of your original risk is the wrong way to trade.


8. What Is Mathematically Optimal Is Psychologically Impossible: Trading is not logical but psychological in nature, and emotion will always overwhelm the intellect in the end.


9. Risk Can Be Predetermined; Reward Is Unpredictable: Nothing is certain in trading. Reward, on the other hand, is unknown.


10. No Excuses, Ever: If you do not understand what is going on in the market, it is always better to step aside and not trade.

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