Currency trading signals and alerts that I am sharing must be mastered by a trading professional and a newbie, both willing to earn some pips. However, not everybody uses these instructions and too often ignoring those turns into the main obstacle for a booming forex experience. One doesn't have to be a genius to understand that almost every normal trader falls under the same fx trading principles that work for everyone, well, perhaps excluding some large banking institutions manipulating the foreign currency market. The real problem occurs when we observe our trading in real action, and very frequently the majority of traders either fails to remember what they have learned or stupidly disregards it. The explanation to this phenomenon is pretty obvious - the traders that usually disregard the instructions are brand new people, who have either never been bankrupt or suffered merely small money losses so far. New investors and beginners pretty often fly high in the fantasy with all their hopes and desires of reaping millions of dollars in several months. So why bother making use of some stupid use this and do not use that? Let’s dig into some of them and see what we could have been missing.

Do not risk big. The typical funds' management rule in forex trading is to take the risk of just 2 percent of your money or less per one trade. This way you would be losing just a tiny proportion of your total invested capital even with quite a few incorrect trades successively. That kind of trading in crazy and unpredictable market happens very frequently and you need to be ready for losing more than one time in a day. Just assume what could be the result, if you were risking 5 or 10 percent of your trading account per 1 trade. Such trading would, naturally, end very rapidly - in one or two weeks, or even sooner. Do not plunge into a big account capital risk for one trade operation. I once traded by taking more than five percent of my account just for one forex pair trade. To start with, you can never tell and you will never predict with a hundred percent accuracy where the foreign currency market will move. Even if your initial guess wasn't good, there isn't any guarantee that your second or third fx trade will be correct. The probability of making an error the next time will be smaller, but it does not disappear completely. I suggest using no more than 1 or 2 percent of your trading account per trade and moving your stop loss to entry, so as to tighten your stops. You have to decrease the risks to a low level, and using this method even a faulty trading plan wouldn't drown your account completely. It's especially important when speaking about numerous forex trades, for example, fifteen in a day. Additionally, you cannot overlook the psychological problems - dealing with 4 tiny losses in a day is far better than seeing 2 wrong trades costing 40 percent of your trading account capital. Keep in mind, it‘s pretty easy to burn your funds in one day, when the risk is ten or twenty percent for a trade and that's already a catastrophe. Newcomers have to be even more cautious than professionals, as their currency trading plan and strategy is new and only the time might reveal if they are implementing the correct trading principals. I would personally suggest trading in some forex demo account with a suitable trading platform - just to test your investment strategies.

Never change your trading strategy - except if it's a total disaster. Your currency trading system may and will surely be tested in various harsh and unpredicted forex currency market situations and your strategy might not work. Nevertheless, don‘t try to change anything, just don't freak out. Even if your trading strategy doesn't work in a suddenly shifting forex market conditions on some particular day - there aren't any flawless tactics in this business. My advice is to close your PC, put on your shoes and take a stroll in the park or something like that. There's always a successful trade the next day.

The next thing is reducing the size of your bad trades and increasing the profit of your winning trades. You will need endurance and perseverance to follow this principle, but it's worth a great deal. It is fear that makes us to take a couple of pips in our favor and move stops further, if the price reverses in the wrong direction. The best option here is to set clear profit targets and stops and stop thinking about them. If you suffered a stop loss - be sure that it's a small percentage. Even if your stops were triggered and the price of a currency moved back - you can not foresee all the movements, therefore stop thinking about it and look for a new occasion. Your main objective is to have more profit after a sum of trades in a particular time period.

Opening 2, 3 or 4 currency pair trade positions of one currency pair will help minimizing your stop losses and extend your gains. I would advice closing your positions in stages at preset targets of thirty - forty pips, then - 70 - 80 pips, then one hundred pips and the very last one, if you still have something left, can be placed for a bigger target. Stop losses should be handled suitably - as the profit is taken, stop orders must be set at zero. The idea of fixed money already in your account provides a relief which takes off the trading pressure. After the first profits, you can just loosen up, having in mind that your remaining positions may make even more profit without any risk.

These are just basic and very simple rules to master, nevertheless, I found them pretty hard to follow.

Author's Bio: 

I have been trading in forex for almost 5 years now. More info on currency trading topics you can find in my blog: