1. Don’t Misuse Low margin and high leverage facility
Never try to over leverage than your capacity. First of all determine the spare cash that you can afford to loose. You may call it as risk capital. You should never risk your life long savings that you can not afford to loose. Even though the high leverage facility is an important advantage but there are dark sides that need not be explained. Forex trading on borrowed money is the worst mistake that small time forex traders and investors make.
2. Never Jump on the Bandwagon without Proper Forex Trading Training
If you are entering the forex markets without any forex trading training then please don’t do it. Even if you have gathered sufficient knowledge on how the forex currency trading markets work, make it a point that forex trading education is a continuing process.
3. Do Your Own Fundamental Research and Technical Analysis
You should be aware about day to day fundamental factors that contribute to the ups and downs in the forex currency rates. Remain updated on economic calendars and various data releases on inflation, GDP, CPI, trade balances, other monetary policy matters and geopolitical events. Technical analysis of the price and volume charts is the best tool to spot identifiable forex trading patterns. Most of the forex traders rely on exact entry and exit points based on the break outs, supports and resistances levels for a potential profitable trade. Don’t stick to only technical analysis. Be flexible and use a right blend of fundamental and technical analysis.