What you should know about forex before trading?

As mentioned in the earlier article forex trading is one of the riskiest but a money pouring trades in the world. So before you enter this world make sure you know the things you ought to know.

The first and foremost rule is to run on your profits and cut your losses as early as possible. The wiser men always layout a plan and stick to it apart from their overwhelming emotions to go loose from their plans. People get carried away in situations where they go through a winning streak.

The simplest rule in forex trading is the most difficult one to implement and it’s the reason for most of the trader’s demise. Many traders violate their predetermined plan and take their profits before they reach their expected profit margin as they feel extremely uncomfortable sitting in a profitable situation. The same traders will easily sit on loosing position allowing the market to move against them, and loose hundreds of points anticipating the market to turn around. When you trade always predetermine the amount of loss you can absorb and ensure you put a stop when that target is hit.

Do not over trade. The common mistake that most traders do is, they leverage their account too high by trading for much larger amounts than their accounts could withstand. Just because one currency needs 10 000$ as minimal to trade, a trader with 50 000$ should trade a 5 lots. The golden rule at these situations is not to use more than 10% of your account at any time.

Good anticipation and execution is yet another aspect that everyone should consider. The profitability of your decisions and anticipations are not counted in one of your trades, but from your overall trade. So keep in mind the fact that you make profit or loss in the previous trade is not important at all.

So how should you start a day’s trade? Make preparations for at least 15 minutes as an elite athlete makes preparations for an event. Sit in a comfortable position, make yourself relaxed and breathe deeply. Exclude your mind from all thoughts, consciousness, and body sensations. Maintain your all your consciousness only on your breathing which enables you to get rid of others. Forget all your worries about your past and future trades and reach a point of threshold which enables you to surpass boredom and attain a clearer mindset. This might take around 15 minutes as average, but may be more for some people.