Hello readers, in today's article we are going to look at the 10 golden rules that govern the forex trading space, if you intend to start forex trading any time from now or if you're already into the forex trading space, make sure you are following these rules if you wanna see results in your game.
Rule 1. Education is key:
If you want to master any skill in the world, the first step is always to learn what others don't know and what I mean here is you have to invest your time in learning the skill. Most people who come into forex trading have a get rich quick mindset which is always cause of their downfall in the industry.
You have to look for legitimate content that you can use to attack the markets, get a good strategy that works for you and give it enough time, trust me you'll begin to see the results sooner. As they say, it takes 10,000 hours to master anything in this world.
Rule 2. Have a plan:
I have personally found that having a trading plan is one of the most important yet often over looked aspects of forex trading. Having a trading plan saves you from a lot of unfore seen problems as you'll attack the markets well knowing what you want and what to do. It's often said that a fool with a plan, can beat a genius without a plan and this saying often comes true in forex trading, don't be the genius in this case.
Rule 3.Patience is Virtue:
My mentor always told me that you know that you have really understood trading if you come to the charts and you fail to get a trade set up, most beginner traders and even some professionals end up forcing trades that don't go their way and they later realise that they had not followed their trading plan any way. To avoid all the chaos ,be smart, be patient follow your plan, if you see your set up, take the trade follow your stop loss and take profit cretria and I promise you'll start to see blues on your screen.
Rule 4.Stay informed:
If you decide to start trading, then decide to know what's happening in the world, most traders make a mistake of mastering their technicals and forgeting all about fundamentals, not knowing that the technicals happen because of the fundamentals, there is nothing like having a promising trade that is running in profits and all of the sudden your position is liquidated and your stop loss is hit in one minute. Always make sure you know what;s happening on the economic calender to avoid these incidences.
Rule 5. Choose the right Broker:
This is one of the biggest mistakes you'll ever make in forex trading, remember your capital is in the hands of your broker. The broker processes all your transactions that happen in your account, whether it's withdrawals, deposits and so on. So if your broker is shady you already know that you'll end up losing everything in your account. I recommend to make your own research and find a broker of your choice that suits your needs depending on your location. I personally use Exness broker and it has been good to me ,its one of the biggest in the world, their deposits and withdraws are very fast not more than 3 minutes. So consider getting a good brokerage trader!
Rule 6. Be realistic:
Another big problem we all have is being super unrealistic in our trading journey, when I started trading I was hoping I'd flip my $10 account into $1000 in maybe roughly 1 month. But this didn't happen ofcourse. It;s good to have big ambitions but often enough we become a burden to ourselves by setting unachieveable goals. Some guru on tiktok can flip $10 into $2000 in a video just because that's what they want you to see they have enough money to open 30 $10 accounts and blow 29 of the accounts and that one account that was flipped is the only one that will be posted on social media. Am not saying that's what every flipper does but hope you get my message, in most cases it's not reprecable.
Rule 7.Accept losses as part of the game:
Losses are inevitable in trading and whoever lies to you that they have a 100% winning strategy is pure BS. Learn from them, adjust your strategy if needed, and move on. Just make sure you dont repeat the same mistake twice.
Rule 8.Don't overtrade:
Avoid the temptation to make frequent trades based on emotions or short-term fluctuations. I know in most cases you might lose some money and decide to revenge trade inorder to recover ,but this is the biggest mistake you'll ever do if you have been trading you can testify, it's as if the market can smell your fear and rage when you decide to revenge trade and if you lose you'll always lose massively.
Rule 9.Use stop-loss orders:
Set automatic orders to exit a trade if the price moves against you, limiting potential losses. I know, I know as soon as you open a trade, you might develop coco-nut head and decide your positions to run naked, but remember you get a winning trade tomorrow but not when your account is empty, so if you know that getting trading capital is an issue on your side. Always, always protect your capital at all costs.
Rule 10.Backtest your strategies:
Test your trading plan on historical data to assess its effectiveness and identify potential weaknesses. Mater your strategy like the back of your finger. Avoid the cycle of doom where most traders waste alot of time looking for the 100% winning strategy.
If you're following all the above rules in your trading ,then I dont see what would stop you from being a profitable trader. Hope you enjoyed reading our article. Check out related articles.
"Fear is normal. The ability to overcome it is what makes you a good trader." - Ed Seykota
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