The Forex Market is one of the biggest markets in the world with the daily transaction size reaching USD 5.3 Trillion. People from different asset classes are turning into Forex due to its unmatchable advantages. It is open 24 hours and the deep liquidity allows traders to enter and exit the market in an instant. Moreover, people can start trading with relatively low capital compare to other investment such as stock market. Nevertheless, the Forex market can be a huge graveyard for your money if you cannot trade wisely. Even worse, the loss can exceed your capital due to highly leveraged trade facility offered by some Forex brokers.
Navigating the ups and downs of the Forex market requires solid guidance and rules that you better never attempt to disobey. Here are the rules that have passed the test of time and market turbulence that you must keep in mind in order to profit in the Forex Market.
Have a clear trading plan and stick to it. You should define your objectives in Forex trading. Do you want profit USD10 per day? Do you want to accumulate USD1M for your retirement? Those are the questions that you should start asking yourself before you enter the Forex Market. By answering the questions, you will then be able to formulate your daily, weekly, or monthly strategy. For example, if you want to profit USD10 per day then you should, at the very least, put up USD1K capital, open a daily trade of 0.5 lots, with the aim of 20 lots. Remember that the strategy you formulate will be highly dependent on your risk tolerance. Normally, the bigger your tolerance the more aggressive your strategy will. Whatever it is, always stick to it. More often than not, the losses are caused simply because traders are ignoring their own game plan.
Do not be greedy. This is easier said than done, though. No matter how hard it is, you should try your best to tame the greediness since it is the main evil that has destroyed even the most proficient traders in the planet. One way to control the desire is to always stick with your plan. Once you have accumulated profit as planned, stop trading immediately and do something else. As important as controlling your self from the "hunger of profit", you should also control yourself from the "hunger of lose". It is very tempting when you experienced consecutive losses, to open up a trade again with the objective to offset your losses. That will never work. Just like when you reach your target profit, stop trading immediately when you experienced more than two consecutive losses.
Stay away from trading terminal. This may sound like a counterproductive strategy, but this is the lethal weapon that you should utilize in your trading career. Sitting too much in front of your computer, starring the charts in your trading terminal can really kill you, physic and money wise. Since it will tempt you to open trade again and again. That is why; you should limit the time you spent in in front of your trading terminal. Spend more time doing otherwise, instead. Be with your family and enjoy the life. It will definitely make your mind clearer, ready to make that successful trades whenever you are come back. After all, the main point to start trading in the Forex Market is to have flexibility and be your own boss. So why slave yourself by staring into that flashy charts over and over again?
Those three rules are the most important yet many traders are so ignorant toward them. The amount of time you invested in acquiring fundamental and technical analysis in Forex will not be useful if you set aside those guidelines. Always remember that to succeed in investment and trading require discipline. Time has proved that those discipline traders that profit consistently in the Forex market always live and breathe those guidelines.
