Trading forex in a highly leveraged account promises great earning potential but at the same time great risks. In order to safeguard your capital you need to have a forex management system in place.
Here are 10 proven and tested rules that, if followed, will keep your capital safe and be a springboard to a profitable forex trading career:
- Never risk more than 10% of your capital on any one trade.
- Use stop loss orders. Never enter a trade without also placing a stop loss and never remove or modify your stop loss.
- Don’t overtrade. This means that you shouldn’t trade just for the sake of it. Make sure that every trade you take is for a good reason and not just because it’s been a while since the last trade and your eager to enter the market.
- Don’t trade against the trend. Find out what the current trend is (up or down) and trade with it.
- If in doubt, get out of the trade and if don’t take a trade if your in doubt.
- Never let a profitable trade turn into a loss. Have a plan on how you will place your trailing stops and stick to your plan.
- Don’t close your trades to take a quick profit. Know your exit targets before you enter the trade and don’t exit the trade until it is reached. Taking a quick profit will work against you in the long term.
- Never exit a trade because you have lost patience.
- Don’t favor going long to going short, or vice versa. Go with the trend.
- Never sell because a new high is reached buy because a new low is reached.(szgvycinhm)
