Forex trading may become a much easier activity if you follow your own or someone elses
- Risk only 3% of the total trading capital with each trade. Generally, it is 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-riskratio should be no lower than 1. Many currency traders prefer trading with the ratio not less than 2 or even higher. That is 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-riskratio of 2 would probably be a better decision.
- Do not leave the positions open through the weekend. The weekly opening gap can be a killer. Do not 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-losstrigger far from the levels you planned it to.
- Wait before opening a new order after you have 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 is not a best decision, but for the absolute majority of the
medium-termForex traders it is.