There are a number of important rules to follow when you are trading in Forex, or any other market. Every strategy will involve different objectives and methods, but there are some key points to consider one of which is:

Be consistent and disciplined

In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do. This takes extreme confidence in your trading systems, good robust reliable technology, and the mental discipline to stick to your trading plan whatever happens (assuming it is complete). An underlying assumption about being consistent and disciplined is that you have a pre-defined plan for every situation you may face in your trading, so that you know how you are defining what being consistent is.

Your plan needs to include at least the following items:

  • All your trading rules for entering, adding to, and exiting positions
  • What you will do if your trading computer, internet connection, broker, power, telephone etc. fails?
  • What you will do if you are unable to trade?
  • What you will do if you lose X% of your account?
  • What you will do if all the markets are closed and you can't exit your positions?

Unless you write the answers down to all these issues, you cannot be consistent and disciplined in your approach to trading and if you lose money you will not know whether it is because you didn't follow your plan, because your plan is incomplete, because your systems do not work, or simply because you are going through a losing period.

For more of the Golden Rules of Trading, avail of the free copy of "Introduction to Foreign Exchange" from Go Markets here.