Guidelines For Traders

If you're new at the Forex trading business, you should read the trading guidelines below. These besic guidelines should help someone who is new to be a more effective and successful trader.

1) Look for a respectable broker: The broker should have the ability to trade efficiently and they should depend on consistent spreads and abundant liquidity. The broker should have the ability to establish a strog position in the market - they also should have the ability to close out in a position of a decent market price - very important.

2) Live to live for another day: Apply sensible money management skills. As much as possible avoid using extravagant behavior that puts your investment at risk. And the most important thing is, always trade with a common sense, not emotion.

3) Don't trade if you are being emotional. Maintain your discipline and stick to your plan: Before making any trade, you should establish a trading plan to follow. Set reasonable reward or risk parameters. Do not override your stops for emotional reasons. Again, don't react to price action (this means don't purchase just because the trade looks cheap, or looks high for selling). Acquire evidence back-up before you trade.

4) Do not bet. Forex trading is not for betting. Betting is often used without viewing the matter at hand. Use your learned basic strategy.

5) Do not leave stops at unrealistic levels!

6) Trading against and with the trend: Consider trading with the use of trailing stops; this is trading with trends, and when the trader is trading against the trend, they should be disciplined in taking profits and, as much as possible, do not hold out for the end pip.

7) Don't allow one day's trading to affect another: Don't let one success affect you; success does not rely on one trade. As the trader, try to avoid getting caught up in emotions, especially on the highs and lows of individual trading. Your objective should be consistency.

8) Forex trading is based on multi-currency: Forex is based on one currency vs. another currency, example: EUR vs. JPY

9) Be aware of what news is coming out everyday don't be blindsided: Be aware of what news is coming out so you can be aware of what might happen next. You must also be aware of trading ahead on changes following any key releases.

10) Be aware of illiquid market: Adjust your strategies during pre-holiday periods, and during holidays, especially. Take into account a thin liquidity. Be cautious of central bank intervention in markets of illiquidity.