1. PLAN YOUR TRADE AND TRADE YOUR PLAN. To reach success it’s necessary to have a trading plan, which should consist of a position, why you enter, stop loss point, profit taking level, plus a firm money management strategy. A good plan will make all your trades emotionless.
2.TREND IS YOUR FRIEND. Do not buck the trend. When the market tends to increase prices, go long. On the reverse, if the market downtrends, go short. Never go against the trend.
3. CONCENTRATE ON CAPITAL CONSERVATION because this is your main goal. Do not trade more than 10% of your deposit in a single trade. For example, if your total deposit is $10,000, limit every trade to $1000 or else you'll be out of the market very soon.
4. CUT LOSS WHEN IT IS NECESSARY. If a trade goes against you, sell it and let go. Do not hold on to a bad trade with hope that the price will increase. Almost certainly, it will result in losing more money. Before entering a trade, determine your stop loss price, a price where you must sell when the trade turns sour. It depends on your risk profile as of how much you should set for the stop loss.
5. RECEIVE PROFIT WHEN THE TRADE IS GOOD. Before you enter a trade, decide the amount of profit you desire to take. Take the profit when a trade turns out to be good. You can take all the profit at one go, or take profit step-by-step. When you've recovered your trading cost, you’ve got nothing to lose. Sit still and watch the profit run.
6. BE UNEMOTIONAL. Greed and fear are the two biggest emotions in trading. Do not let them affect your trade. It is an automatic process and it's not for the emotional ones.
7. DO NOT BASE YOUR TRADE ON FRIEND’S OR BROKER’S ADVICE. Trade only after conducting your own investigation and study. Be a knowledgeable trader.
8. KEEP TRADING NOTES. When you purchase or sell a currency or stock, record the reasons why you do it. Analyze and note down the mistakes you've made and the things that you've done right. By revising your trading notebook, you learn from your past mistakes. Work on your mistakes, keep learning and improving.
9. WHEN UNCERTAIN, KEEP OUT. When you are uncertain where the market or stock is going, stay on the sideline
10. DO NOT OVERTRADE. It’s better to have no more than 3-5 positions at the same time in order not to be out of control and make emotional decisions when there is a market change.
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