Begin slowly.
Many new traders make the mistake of jumping right in, but you should not enter a trade
until it has been thoroughly thought out. When you do, start small
and gradually but steadily build your confidence. In trading, there is no such thing as
beginner's luck; when you first start, you will lose money on some trades and make
money on others.
Choose a suitable currency pair.
Determine whether you are at ease with the level of volatility in the forex market. Do you
want to try to make a quick buck, or do you want to accumulate a steady profit over
time? If you're looking for short-term gains, you'll most likely be looking at markets that
are fairly active, with a high daily range in comparison to the price spread. A tight
bid/offer spread also implies a reasonable amount of liquidity, which is advantageous if
things go against you, as fast-moving markets provide more opportunities to close a
Define your goals.
One of the most important rules is to trade with the trend: if the market is rising, enter a
‘buy' trade; if it is falling, enter a sell trade. Attempting to choose the top or bottom is
probably not a good idea. If the market is rising, decide where you want to buy and place
your trade, and vice versa if you want to sell. You should have a risk-management
strategy in place, with pre-set stop-loss and take-profit levels. Finally, you should not
trade for the sake of trading; being neutral is also a position.
Maintain simplicity.
It is best not to overcomplicate your analysis with a variety of technical trading
indicators, as this can sometimes produce contradictory signals, leading to cluttered
Examine the past
One of the central tenets of the technical approach is the evaluation of the past – the Dow
theory is based on the premise that ‘history repeats itself.' Based on previous experience,
looking at past price action on an asset can provide clues as to how the price will behave
in the future. Given the right set of circumstances, human behavior can be somewhat
predictable, and this is how the technical approach can work. Price is determined by
market forces, and the price is determined by people like you and me who experience the
same human emotions of hope, greed, and fear as everyone else. Seeing where previous
highs and lows have occurred in the past, as well as how the market has behaved
previously when at these levels, can provide clues as to what might happen next,
allowing traders to develop a variety of strategies using ‘what if' scenarios.

Take charge of your finances.
Money management is a critical component of a trader's overall profitability. The desire
to make a profit as soon as possible can lead to many people losing money. This is
because traders frequently run stop-loss orders until they are executed but do not do
the same when making a profit. If you work on a 50/50 basis, making a profit on 50% of
trades executed, you're unlikely to make an overall profit.
Understand your statistics.
Analyze where you've made and lost money by keeping track of all your transactions.
Tracking the performance of your trading history allows you to identify patterns in your
failures and successes, allowing you to eliminate the poorer trades and place more of
the profitable trades.
Take a break if you're losing money.
Take a break if you are consistently losing money and nothing seems to be going right. A
monthly float to use as trading capital is a good idea because if it runs out, you should
stop trading for the month. Take some time to clear your mind and restart the following
month. Resist the urge to ‘chase the market' to make up for lost money.
Focus on one trade at a time.
Avoid taking on too many trades; the simplest trades are usually the best.
Keep trading costs in mind.
Always keep carry costs in mind when running positions overnight or over multiple days.
Selling a high-yielding currency incurs higher costs than selling a low-yielding currency.
Don't rely solely on one technical indicator.
Looking at an oscillator, deciding the product is overbought, and trading against the
prevailing trend is a common trading mistake, but it is usually a mistake. Oscillators and
moving averages should be used in conjunction with other indicators such as support
and resistance levels and Bollinger Bands to supplement trends.
Learn how to use leverage in forex trading.
Trading forex necessitates the use of leverage to gain greater exposure to the markets.
This can be advantageous because you only have to deposit a percentage of the total
value of the trade, but it can also increase losses. Make sure you're using riskmanagement
tools like stop-loss orders.