Trading Rules for you to adopt or adapt to suit your personal requirements.
Have a Written Trading Plan
Have a written trading plan that outlines your profit targets along with details of how you will manage your trades, risk and money. Set daily, weekly and monthly goals so you can monitor your progress. Be disciplined and stick to your plan while trading. Review regularly and adjust where necessary.
Keep a Trading Journal
Keep a trading journal in which you record and review your actual trades. This will help you to understand what went well and not so well and enable you to learn from both your positive and negative results. A further important benefit of keeping a trading journal is you can easily monitor the success, or otherwise of a specific strategy.
Know Your Risk/Reward
Know your approach to risk/reward and your exit strategy for every trade.
– Always trade with a Stop Loss
– Set pending orders for your Stop Loss and Take Profit levels upon entering the trade.
– Do not trade more than 5% of your account in a single trade. More aggressive traders would trade up to 5%, whereas more conservative traders would more likely risk no more than 1-2% in a trade.
Stop Loss to Breakeven
When you are in profit you can move your stop loss to your entry price. Your risk is now zero meaning the worst case scenario is you will break even if you hit your stop loss. You can always re-enter the trade on the retracement. As you move further into profit continue to move an additional 10 pips at a time (or whatever works for you) to protect your profit.
Take Responsibility for your Trading
Don’t take signals blindly. Check your charts and do your own swift analysis both for confirmation of the market movement and for best entry. Take personal responsibility for your own trades.
Stay focused and switch off any devices, social media or anything unrelated to your trading so you can stay focused while you are trading.
Take Regular Breaks
Take regular short breaks throughout your trading day. Go and do something completely different and come back fresh and ready to go.
Expect, and be ok with losses. Stay focused on the overall picture.
Know when to Trade
Trading is 24 hours a day, 5 days a week. However knowing the major forex market opening and closing times will give you knowledge of the best times to trade. The major trading hours are during London and New York trading sessions and trading times of the global markets can be found here http://forex.timezoneconverter.com
Know When to Stop
– Stop trading when you reach your daily target. Go to demo or stop for the day.
– Stop trading for the day if you experience 3 losses.
– Stop for the day / take a break when you achieve a run of wins so you stay focused and avoid overconfidence.
– If you are not in the right frame of mind or you are feeling angry or upset do not trade as your emotions will likely affect your trading.
Stick to the Rules
Having a written trading plan and your own personal trading rules will enhance your learning and give you an edge over the majority of would-be professional traders. You will have a clear focus, and insight and understanding of what’s working well, and not so well for you. This will enable you to refine and make necessary adjustments and give you a greater chance of success through trading.
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