1. 🎯 Develop & Stick to a Trading Plan
Define clear goals, risk tolerance, and strict entry/exit rules to avoid impulsive decisions
Include criteria for using stop-loss, take-profit levels, and daily loss limits.
2. Use a Demo Account First
Practice your setup risk-free before going live .
Backtest your strategy on historical data
3. Risk & Position Sizing
Limit risk to 1–2% of your total account per trade
Use the formula:
Position Size = Risk Amount ÷ (Stop‑Loss Distance × Pip Value)
Adjust size based on volatility or account equity changes
4. Stop-Loss & Limit Orders
Always place stop-loss orders to cut losses automatically
Use trailing stops to protect profits as trades move favorably
Use take-profit orders to lock in gains without second-guessing
5. Favorable Risk‑Reward Ratios
Seek setups with at least a 1:2 or 1:3 reward‑to‑risk ratio
6. Diversification & Correlation
Avoid putting all capital into a single pair or strategy
Choose pairs with different drivers—e.g., EUR/USD, USD/JPY, AUD/CAD.
7. Use Leverage Carefully
High leverage magnifies losses—use conservative leverage
Match leverage to your size, volatility, and experience.
8. Maintain Trading Discipline
Avoid emotional trading, revenge trades, or deviating from your strategy
Define daily/weekly loss limits to prevent “bleeding” during bad streaks
9. Keep a Trading Journal
Log every trade: entry/exit, reasons, emotions, errors
Review regularly to identify weaknesses and refine tactics.
10. Stay Informed & Adaptive
Follow economic news, central bank decisions, and geopolitical events
Adjust strategies when volatility increases—reduce size or spread stops .
Revisit your plan and risk parameters periodically
11. Consider Advanced Tools & Hedging
Use automated trading or mirror/copy trading with verified track records
✅ Quick Checklist for Each Trade
Clear setup aligned with your plan
Risk ≤ 1–2% of equity
Stop-loss & take-profit in place
Favorable (≥2:1) risk‑reward ratio