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:

Don't take too much risk

One of the most devastating mistakes any trader can make is risking too much of their capital on a single trade. One thing is certain in trading and that is if you lose all your capital you are out of the game. Why risk so much you could be prevented from continuing? There is a saying in poker than going all-in (risking all your chips) works every time but once. This is true of trading.

If you risk all your account on every trade it only takes one loser to wipe you out (and no trading method is 100% accurate), so you will be out of the game at some point - it is only a question of time.

By its very nature FX trading involves leverage, your provider may require less than 1% initial margin to cover a position, but it’s wise to leave some slack on your account to avoid immediate margin calls if the trade goes against you. If you are worried about the size of a trade then it is too big and you should reduce the size immediately. Remember that longevity is the key to making money by trading - slowly over a long time with minimal risk, is always preferable to rapidly with too much risk.

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