The global Forex market has a daily trading volume of about $5 trillion. There’s a huge amount of money in Forex trading, and if you know what you’re doing, you could be a part of it. The most important thing when it comes to trading is education. You should always understand what you’re trading and the strategies involved. This will help you get the best results and stop you from making costly mistakes. In this guide, we’ll cover some of the most important trading rules that all traders should know.

Always Use a Stop Loss

You should always do what you can to mitigate risk, and a stop loss will protect you in the case of substantial slippage. You should do this as soon as you enter a position, and you should only move a stop loss forward – never back. Without stop losses, you run the risk of losing a lot of money, so you should decide them as part of your plan, and be firm about them.

Use Minimum Leverage

High leverage can be tempting, but it’s also risky. Try not to trade too large relative to your available margin. Keeping it as low as is needed for your strategy is the safest choice.

Stick to Your Plan

Any skilled day trader should have a plan. People often let their emotions take control, but this almost always leads to mistakes. Form a plan based on logic and strategy, and stick to it.

Know What’s Going On

Forex market trading can be complicated. You should only trade securities that you understand. Calendar events can have an impact on the market, so you should always stay up to date. You can then factor these events into your plan as needed.

Plan Your Strengths

The market is always trading, but you don’t need to be. There will always be opportunities to make good trades, so don’t jump at every good chance you see. Being selective will help you make the best trades and maximize your profits.

Stand Aside

Taking a step back will allow you to see things clearly. When you have no positions, you won’t have the same pressure as when you’re trading. This can allow you to better plan things out and make effective decisions leading to trading success.

Take Profits

The whole point of having a trading account is to make money. Taking profit reduces your exposure helping to mitigate risk and protecting what you’ve already earned.

Select the Right Pairs

A typical trading app will offer plenty of pairs. Make sure you analyse your options to determine risk so you can figure out which pairs will work best with your strategy.

Check and Check Again

Even expert Forex traders can make mistakes. All it takes is a single mouse click to end up with major issues. Take the time to ensure you’re making trades exactly as you intend to at all times.

Take Money off the Table

When you make some sizable profits, it can be a good idea to withdraw some. If you leave it all in your margin account, you may end up taking greater risks than you should and could lose the profits you’ve made.

How to Start Forex Trading

If you’ve reached a point where you’re feeling confident and want to begin Forex trading, The Liquidity can help you get started. You can create an account with us to trade on the Forex market, as well as stock indices and commodities. You can open a demo account today to give our platform a try.