Rules of successful trade:

Reduce your losses and allow profit to grow.

The basic error of the majority of traders consists in that they limit the profit and in any way don’t limit loss. The person has the extremely unpleasant feeling, recognizing that it is wrong. Therefore the trader will often allow the losses to grow, getting more and more, in hopes that, finally, the market will be developed and will prove its case.

Then after a while, he starts to hope for decrease in losses and gives up hope of profit. Also because of the human nature, the trader wants to take the profit at once and thus to appear right. There is an old statement – “you never start to yell, taking small profit”. But you will never grow rich, following this principle. To be satisfied with small profit is a wrong psychological spirit. If you have appeared right at an input in a position, you will know almost immediately about it and quickly will see profit.

However, if you are wrong, you will see losses and you should leave a position quickly. Accepting of small loss not necessarily means that you were wrong in the conclusions. It simply means that, probably, you have incorrectly chosen time and that you should wait a situation which will allow you to enter into the market repeatedly. Remember, in any speculative situation, the market is the definitive judge. The trader should allow to the market to tell to it, when it is right, and when it is not right. If you see profit allow it to grow while the market won’t be developed and won’t tell to you that you aren’t right anymore and then, you should leave, but not earlier than that! On the other hand, if the market tells to you that you are wrong, would be a serious error to argue with it.

If you don’t presume to lose to yourselves you don’t presume to win.

As it has been noted in the fourth rule, losses are a natural part of trade. If you have no possibility to accept loss, either psychologically, or material, you can’t have any trade. Besides, trade should be led only with use of spare cash which aren’t vital for daily expenses.

Don’t trade in too many markets.

It is difficult successfully to trade and understand the certain market. For the trader, especially the beginner, it is almost impossible to trade successfully in the several markets at the same time. The individual trader simply is not in condition to cover the fundamental, technical and psychological information necessary for successful trade, on a considerable quantity of the markets.

Don’t trade in too thin market.

The liquidity lack in the market will make difficult if not impossible, to liquidate a position at that price on which you want.

Know your trend. – “A trend is your friend”

For the trader the vital nobility about the one who predominates in the market, bulls or bears. When they in force it would be a madness to try to resist to them. However, it is necessary to learn to distinguish when the trend follows the rate and when it is exhausted. Capability of recognition of early signs of an exhaustion the trader will protect itself from stay in the market too long and will be capable to replace a position when the trend changes.

Don’t try to buy in a basis or to sell at top.

It simply can’t be made, if you don’t have magic crystal or any other tool possessing a mystic force. Be patient to wait developments of a trend and then to exploit it.

People who took the decision to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not have problems with this industry.

There is another option – you can hire experienced traders to managed your trading account – read more about forex investment here. Also make sure to look for the knowledge in a good forex book.