1. Trade for the right reason.  Do you trade due to boredom or for excitement? These are bad reasons.  Why else would you trade except to make money.  
2. Match broker to your needs.  This one could take some time and experimentation.  Even after finding the broker that meets your needs, the job is not over.  I'm always revisiting brokers I've rejected in the past to see if they now meet my requirements. 
3. Understand the risks of a position.  This is very important.  I keep the understanding of my risk simple.  I know that most of my positions will risk 2% of my total account balance.
4. Select entries carefully.  I have predetermined entry rules because I want to keep the entry as unambiguous as possible.
5. Mechanics trump everything.  Know the market you're trading.  Become an expert.  This will come with experience.
6. Have a plan.  I don't think I need to elaborate on this one.  This is a must.
7. Have a well-defined exit strategy.  After all, if you don't have an exit strategy, how will you ever make money.
8. Don't put all your equity in one trade.   As I mentioned in #3, I risk at most, 2% on one trade.

You can read a more in-depth discussion about these 8 practives in the March 2008 issue of Futures Magazine.

To read more forex articles, head over to The Forex Project. 

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No. 1 : 36 More Rules

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Submitted by Forex Trader • 2008-03-05 22:24:04

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