Simple Trading Rules

If you have read and understood the introduction in Forex now, you will learn some important trading rules and we are on your way to start creating a solid trading plan.

Do not over-trade

• Yes of course. No one should trade without having the proper means to do so. It really makes no sense as it put the trader in a disadvantaged position even before the trader begins actual trading.

• Beginning traders may wish to use a 1/3 of your total margin only. Do the calculations. Decide if your potential reward is worth the potential risk. If not, look for another trade. 

  
Always use protective stops to limit losses

• The first discipline that any trader should master is to always limit your losses.
• A stop loss order is set to limit a trader's potential loss. The stop loss is placed below the current price (to protect a long position) or above the current price (to protect a short position).

 
Diversify your portfolio

•  Try to avoid "Loading up" in any one commodity or product. 

 Keep emotions in tact

• Don't make trading decisions based on "Fear and Greed", as hard as this may be.
• Make decisions away from the market - "Don't be a screen watcher" 
• Don't let ego get in the way

Trade in the direction of the immediate trend

• It means you should always trade in the direction of recent price movement.  
• Don't try to pick bottoms or tops

 
Don't add to losing positions - TARGET OUT!

• You should have specific price levels for both the target and stop. 
• Don't feel bad about losing trades. They happen all the time. Just make sure you learn from your mistakes.

Keep it simple, more complicated is not always better

• Trade within your understanding of the markets

 Employ approximately a 3 tl reward to risk ratio

• Don't ever risk $2 to make $1
  

Always be a student and keep learning

• An new trader, will find new ways to learn better and faster. 
• One sure way to become a more effective trader is to simply keep learning.

Above all, be disciplined 

• You must remain stalwart in waiting for your "best" opportunity to enter a position, and agile enough to keep your focus on spotting the next exit signal.

With this type of trading rules, you can confidently utilize and fine tune your trading strategy in a controlled trading environment which focuses on long term success.

Well that's it for the guidelines. I hope you find them useful, informative and most importantly, PROFITABLE!

For more information about trading with ICM Brokers, feel free to visit our website www.ICMBrokers.com