Most novice traders think the road to a successful forex career can be achieved through frequent trading or using the most expensive data feeds or advertised Holy Grail systems. With all else being equal, however, a few unadulterated principles are really what accounts for forex trading success.
Respect the Market
If you are going to dive into the forex business thinking that you’ll beat the market and more experienced participants like hedge fund managers and seasoned traders, you’ll end up getting spat out in a matter of months, depending on the rate of your capital losses. Respect the market by closing losing positions early and acknowledging that you will make mistakes many times.
Risk management is another principle that should be encoded into your trading DNA. Manage positions and close immediately as soon as things go south. The markets are unforgiving and can bleed your account dry if you don’t get out of its way.
Don’t try to use several strategies all at once. Use a strategy, stick with it, record the results, and adjust accordingly based on those gathered results. Being methodical allows you to gauge future performance and adjust parameters that do not align with your future investment goals and risk threshold.