How to Setup Trading Rules

No doubt that losing money in Forex is a very stressful and painful experience. Did you ever lose all of your money in Forex. I hope not. But, if it ever happen to you, the first question is “Did you have profitable trading rules?â€‌ and the second question is “Did you obey thems 100% in every trade?

Trading rules and being disclipined with them is the key of success in Forex. All successful traders create a trading rules and trade their rules. In this posting I will write the kind of rules you have to set up.

How to set up your trading rules:

Before you decide to enter the market, whatever your trading style you have to answer the questions below.

1- Where to enter a trade?
2- Where to exist a position?
3- Why should I trade?
4- How much your risk per a trade?

Where to enter a trade?

You have to know exactly where will you try to open the desired position? What happens if
your entry level is not reached? For example your collection of indicators giving you the entry signal

Where to exit a trade?

You have to know exactly where will you exit the position, both if it’s a winning position
(take profit) and if it’s a losing position (stop loss)? Exiting in the correct time without hoping of more profit or hoping that the loss decreasing is one of the very important points that you rules have to include!

Why should I trade?

When it is time to trade, you must think before you act. If you act before you think and make mistakes, your subconscious mind will
take over and record all your ignorant actions and subconsciously create bad trading habits.

Why should you trade?

The question itself needs to be clearer! The question means “There are times that you have to enter the market, and there are times that you have to exit the market, right, Huh? well, there are times that you should not trade at all?â€‌

How much your risk per a trade?
It depends to your money management strategy. I recommend that your risk per a trade should never exceed 3% per trade. It’s better to adjust your risk to 1% or 2% but if you are confident in your trading system then you can lever your risk up to 3%.

The last advise to finish this posting because the most of us forget to answer it daily and hourly even minutely:

1- Being disciplined with them!
2- Being disciplined with them!
3- Being disciplined with them!
4- “Plan your trade and trade your planâ€‌ Which means “Being disciplined with them!â€‌