- Dianne Phuong Nguyen
1. Always prepare for the worst, think how to protect your trade first!Almost all the traders will think how much money or profits they aregoing to make when they trade. This is a wrong mindset. If you are abeginner in forex trading, then you should assume the worst first andnot thinking about profits in the first place. You should be very eagerto protect your trade from losses by shifting it to break even afteryour trade has around more than 40 pips in profits. The trade is alsoconsidered won even it has broke even.2. Don’t take high leverage for granted.Many forex brokers offer a high leverage of 100:1 to 400:1. True it isvery tempting, but you should not use very high leverage for abeginning and for a small forex account, it is not advisable to usemore than 50:1 or 100:1, so as to prevent your account from going bust.Traders thought they can win big using high leverage, but what if theyloose? Their trading capital goes into the drain too.3. Not risking more than 1% to 5% of your trading account.This is a very important money management rule. How much do you riskfor every trade? Forex trading is all about high probability andcalculated risk. If you think you can’t take risk at all, then youshouldn’t be learning to trade forex at all. For a small $1000 account,it may seems by risking 1%, the gains are very small too, but that’sthe right way to build your capital. For me, I’m a conservative traderand I risk only 2% of my trading account per trade.