4 Guidelines for Forex Trading I Follow

Forex trading may become a much easier activity if you follow your own or someone else’s well-formulated guidelines. I’ve based my guidelines on my past Forex trading experience and knowledge gained listening to some of the best stock and Forex traders. What’s important is that the guidelines are not the laws and rules — they are not the only way to success, they just help the traders in their endeavor. Here’s the list of my four Forex trading guidelines:

* Risk only 3% of the total trading capital with each trade. Generally it’s quite hard to come up with the comfortable risk percentage value for your trades if you want to keep a good money management and still let your funds grow at a nice rate. For me 3% is the optimal level — safe enough to save and high enough to gain.

* Reward-to-risk ratio should be no lower than 1. Many currency traders prefer trading with the ratio not less than 2 or even higher. That’s a problem of risk/gain balance too. For me the opportunities with the ratio above 2 are very rare — maybe, because I prefer high accuracy trades. If your accuracy rate is far from 90% than sticking to reward-to-risk ratio of 2 would probably be a better decision.

* Don’t leave the positions open through the weekend. The weekly opening gap can be a killer. Don’t underestimate it. As a swing trader, I prefer to open my positions in the beginning of the week and I always close them before trading ends on Friday. The gap in the price rates that usually occurs after a weekend can make your stop-loss trigger far from the levels you planned it to.

* Wait before opening a new order after you’ve just traded. If you jump into another position right after you closed or opened a previous order is a straight road to overtrading and an empty balance. I always wait some time analyzing opportunities and resting from the Forex market before setting up my next order. Maybe, for the extreme scalpers this isn’t a best decision, but for the absolute majority of the medium-term Forex traders it is.

What anyone should have is a complete and comprehensive guide to online forex currency trading to make it in the Forex market. You should never get into forex trading without forex trading education. Forex Investing is an area that can be both an exciting way to make a living and a very profitable one if you simply follow the simple learning guides that you find on the web.

The benefits of Forex trading include the ease by which trades can be made. As I know that many of my reader’s trade also Forex, not just stocks, I brought them another great guide to online Forex currency trading, called Fab Forex. It’s basically a Forex learning center, offering an array of sophisticated currency trading tools and services, including the industry most advanced trading conditions for CFDs on spot FX, futures, stocks and spot precious metals. Like many other investments, Forex trading involves risky, but with proper research and dedication there are massive profits to be made on the Forex market.



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