Here are some of Common Sense Guidelines for Currency Trading in Forex. If you want to trade long in the future, besides knowing the basic knowledge of Forex, it’s recommended for you to follow this guidelines.

Provided by GVI

Look for a reputable broker

* Ability to trade effectively depends on consistent spreads and ample liquidity
* Anyone can establish a position
* Ability to close out a position at a fair market price is more important

Live to trade another day

* Apply prudent money management skills
* Avoid using excessive leverage that puts your investment capital at risk
* Always trade with a stop!

Don’t trade emotionally, stick to your plan and maintain discipline

* Establish a trading plan before initiating a trade
* Set reasonable risk/reward parameters
* Don’t override your stops for emotional reasons
* Don’t react to price action � means don’t buy just because it looks cheap or sell because it looks too high, Have supporting evidence to back up your trade

Don’t punt

* Don’t punt ( Punting is trading for trading sake without a view)

Don’t leave stops at obvious levels such as big figures (e.g. eur/usd 1.20, usd/jpy 110)

* i.e. JUBBS stops = stops at obvious levels and thus are more likely triggered

Don’t add to a losing position in unless it is part of a strategy to scale into a position

* In other words, don’t double up in the hope of recouping losses unless it is part of a broader trading strategy

Trading with and against the trend

* When trading with a trend, consider the use of trailing stops.
* When trading against the trend, be disciplined taking profits and don�t hold out for the last pip

Treat trading as a continuum

* Don’t base success on one trade
* Avoid emotional highs or lows on individual trades
* Consistency should be an objective

Forex trading is multi-currency

* Watch crosses as they are key influences on spot trading
* Crosses are one currency vs. another, such as eur/jpy (euro vs. jpy) or eur/gbp (eur vs. gbp)
* Crosses can be used as clues for direction for spot currencies even if you are not trading them

Be cognizant of what news is coming out each day so you don’t get blindsided

* Be cognizant of what news is coming out each day so you don’t get blindsided
* Beware of trading just ahead of an economic number and be wary of volatility following key releases

Beware of illiquid markets

* Beware of illiquid markets
* Adjust strategies during holiday or pre-holiday periods to take into account thin liquidity
* Beware of central bank intervention in illiquid markets