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:

Let profits run

This simple rule is the key to being a successful trader. It is three simple words that are very hard to actually implement. When we get a profitable trade our natural fear of losing the unrealised gains kicks in and we truly want to close it out now and take the money. Most trading consists of long periods of small winners and losers followed by a few huge winners that make the difference between overall profitability and simply breaking even or losing due to trading costs(commissions, spread, and slippage).

The key to letting winning trades run is to have trailing stops that are outside the average daily range of the market so that they are not tight enough to get stopped out during 'normal' trading. This means being prepared to give up a significant portion of a winning trade's open profit and is the thing that makes this so hard to implement. Consider adding to clear winning trades if capital reserve allows and avoid stops that are too tight.

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