Rules Of The Successful Forex Trader

I owe my greatest thanks to the person that taught me to set rules for myself when I trade forex. Rules are great because they put a logical barrier on how you'll behave. Since we're emotional by nature, we tend to get emotional with this business, so the best way to get around that is to use rules. Here are the rules that I use.

• Don't Risk More Than You Can Afford: This is the advice you give to a friend that is going to Las Vegas for the weekend. You don't want to put too much money on the table and end up losing out. You need to play it smart and as you get smart you can save up a few months of expenses. When you have that barrier and you're confident enough, you can start to risk more money.
  
• Don't Use Most Of Your Money On One Trade: This really has to do with the fact of balancing out your trades. Putting all your eggs in one basket is sort of stupid, in the long run. If you hit a bad trade, you lose all your money. Break it up into different trades, so you don't end up having all your money riding on one trade.
  
• Decide A Point To Cut Your Losses Before You Buy: This is the best way to learn to cut your losses. Everyone, at one point, gets emotionally invested in a trade and just can't let go. If you set up this simple rule before hand, you just exit when the number is hit. This is what cutting your losses is all about.
  
• Take a break after a bad trade: The time frame is up to you, but you need to take a break. The reason is that you get it in your head that you need to make another trade to win back your losses. That's not smart thinking because it's emotional. There's no guarantee that you're going make a smart move. Take a break and come back with a good mindset.
  
• Trust Your Software: Having software like Forex Killer is about the only thing you have that is truly unemotional. Computers don't get upset, mad, jealous, happy. They just crunch numbers. Software like Forex Killer is designed just to crunch the numbers and find profitable trades. Trust it.
  

By: Charles Nash

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For more information on the Forex Killer software, check out Forex Charting Software.

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