Having a scheme or plan can serve you advantageously in life, but more specifically in forex trading. A clear cut plan allows you to avoid daily distractions and follow key principles that have been predefined as essential to your trading success. Here are some key constituents you should be looking to include in your trading scheme.
This refers to the times of the day you will be trading. The US/London overlap are popular trading hours since pairs are very active during that time. Establishing a schedule helps to give your business a sense of structure that’s needed to keep sane while trading every day.
Pairs to Trade
For beginners, sticking with major currency pairs like Euro vs US Dollar and US Dollar vs Japanese Yen is ideal. Only move on to exotic currencies like the Krona and Real once you’ve gotten enough trading experience.
Risk Amount Per Trade
How much are you willing to lose per trade? Don’t go all-in with your positions and try to use only a nominal amount of leverage for your trades. If your broker offers a 200:1 leverage, use 10:1 or 20:1 at most. This will help protect you from large losses.