Important Success Rules in Forex

Knowledge, experience and proper mental and psychological situation are three important things that all traders should have. As a trader, if your losses are still more than you gains, you should analyze yourself and see where the problem is placed. You should know if you have enough knowledge and experience or not. If the answer is yes, then your problem is in controlling your emotions. You can have the knowledge but you do not trade based on it. You trade based on your emotions.

Some people spend several years in learning and practicing. They read as much as they can and they test a new trading system everyday. It is good to learn more, but to become a good forex trader, you do not have to spend so much time on learning. All you should know is the general things about the forex market, currency pairs, the trading platform (like MetaTrader), technical analysis and chart patterns, candlesticks, some important and useful indicators like Bollinger Bands, MACD and RSI and few more things (see this page). It will not take you more than 3 months to know about all these things.

Then you should choose a trading system based on what you have learned. You should stick to your trading system and do not try a new one everyday or every week. You should keep on demo trading with your trading system until you find yourself experienced enough with it. You should become able to distinguish the strong and sharp signals from the false signals. You should be able to see the exact entry points and the proper place for your stop loss and target. And all these things means that you should be able to trade profitably for a few months in a row. That can be considered as the end of your demo trading stage.

Then you should open a live account and start trading with it. But keep in your mind that as soon as you start trading with you hard earned money, you will experience some new kind of emotions. Although they are still categorized as fear and greed, they are stronger and harder to control. Therefore, you should start trading with a small amount of money, until you see yourself in a level that your live and demo trading has no difference for you, because you merely see the signals. This is a great progress. It means emotions have no role in your trading and they are already controlled. Now you can trade with a larger amount of money.

If you have enough knowledge and you have been practicing for a long time but you still lose, the problem should be in your emotions. You may not know what your emotions are and how they can be controlled. You click on buy/sell buttons but then you will see that you have made another mistake. Your mind makes you see a signal while there is no signal at all or there is a signal but it is not strong and reliable enough. You may have no patience to wait for a trade setup. This is another big problem that many traders have.

And this is the most important rule for everybody: You should wait for the trade setups to form. You should not form the trade setups in your mind.