There are a couple of rules that have stayed as they are since the inception of Forex trading. It is important for a trader to know them in the initial stages of trading. The first and foremost rule is more of an acceptance of the reality. There are going to be losses whenever you trade in Forex.
They are inevitable. The aim of a trader must not be the search of the holy grail of trading that provides him with a surety of profits. Rather he must try and be consistent in the market and must follow reliable strategies and techniques in order to ensure higher profits in comparison to the losses at the end of the day.
When you realize that you have entered a losing trade without a doubt, do not be unwise by sticking to the trade just to prove yourself right and dismissing the rules aside. Always choose to be practical instead of being egoistic.
Do not wait for a magic alchemy of turning your lead to gold. If your trade is right it will show positive results almost instantly. If the results are otherwise it is high time to reconsider.
The second rule is to avoid trading in Forex without a stop loss order. It must be placed along with the entry order to avoid losses from running for too long. It means the trader must be aware of when in the future he is likely to incur a loss or a probability of a loss, otherwise he must avoid placing a trade. If a trader does not place stop orders, that doesnâ€™t show confidence rather it shows naivety.
It is necessary for a trader to understand that there is always going to be another trade. Do not keep accumulating losses and be quick on your feet in changing trades.