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FAST! I remember my first FOREX account, financed with 800 USD, turned into 400 USD in just two weeks.
It was like a snowball going downhill, gaining speed and energy without an end in sight.
In reality, there was an end to the madness because I chose not to deposit more cash into my Forex account until I had a grasp on what I was actually doing.
So why did my account lose 50 % of its value in only 2 weeks? The answer is "over trading".
Here are three guidelines that you can integrate to limit your risk and provide yourself an opportunity to start producing profits.
Do Not Use Too Much Leverage If you are placing more than four percent of your account on any one trade, you are asking for a rapid conclusion to your Trading career.
This will mean that your stop-loss (non-negotiable) is required to be close enough to your entry price to assure that you will not lose more than 4 percent of your equity.
Don't forget that the marketplace can "gap" occasionally, so your stop-loss ought to be even closer to make up for unpredicted "market slippage".
If you do not have the willpower to stick to your stop-losses, then you should immediately leave the trading world now.
Trade One, Selected, Setup When getting started, I recommend choosing one entry strategy and solely trading on that one signal.
You must have a sharp description of what it means to consider a trade entry, and you will not make a trade unless you see that entry signal.
This means that you can not take a trade every time you feel like it.
It can be very difficult to remain on the sidelines when you watch the markets moving up and down, but you must remain faithful to a simple trading plan that minimizes thinking throughout the early stages of your Forex trading.
While you get practical experience and see steady gains, you will be much more well prepared to start trading multiple trade setups.
Recognize When it is Time to Take a Break from Trading Quite often your trade entry signal isn't functioning the way it is supposed to.
We have a straight forward guideline for day traders - 3 losing trades, back to back, and you need to stop trading for the market session or you must go to practice account.
When you are geared up to start trading again, start smaller (maybe 1 / 2 of your regular size) to ease back into a winning rhythm.
One of several mistakes I made with my first account was "over-margining" my positions after a string of losing trades ("double-up").
The best way to avoid this behavior is to restrict yourself from trading when your technique is not performing.
To put it simply, you have to create your own guideline for when to take a break from the markets.
There are also other scenarios that could negatively affect your trading like tiredness, sickness, personal issues, and many others.
You need to be conscious of your body and psychology so you can determine when you are ready for trading and when it is best to go for a walk.
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