1. Know yourself and your personality: Making sure your trading philosophy matches your money management philosophy and your personality is key to making your trading plan work.  If your trading plan doesn’t suit your patience level, or your comfort with risks, you are bound to deviate from the plan.  This puts you at risk for making off the cuff, mood based decisions that will most likely be detrimental to your portfolio.  When you know yourself and you strategize accordingly, you are more likely to stick to your plan which gives you much better chances of success.
  1. Learn as much as you can: Make sure you understand exactly what you are doing. Study the mistakes and successes of other before you.  Learn what the charts represent and understand what they are indicating and how that will help you.  Understanding the possible outcomes of your decisions is essential to Forex success. There are numerous resources both online and in print for you to educate yourself.  Educated decisions are much more likely to be profitable than decisions made on rumors or gut feelings.
  1. Choose the right broker: There are thousands of brokers to choose from all over the world. Many are not carefully regulated.  Unfortunately, the Forex industry has been victim to many scams.  Read reviews, check out how regulated and how well insured a broker that you are interested in is.  Check their track record.  Make sure the withdrawal process is smooth. Then, examine what the account choices are. Different brokerages allow for many different size accounts.  Each of these account types have advantages and disadvantages.  The account types might have different leverage amounts, minimum deposits, and levels of customer support.

  1. Choose a strategy and make a trading plan: You don’t have to invent something new. There are well tested, established strategies.  Each strategy starts with knowing how much time a trader has to devote to trading. The different strategies are based on trading philosophy, ability to handle risk, and what your goals are.  Once you know which strategy you are using for your trades, you can make a plan.  Plan your stop losses, the amount of leverage you will use, the currencies you will be trading and how often you will be trading.  Make this plan according to your expectations and habits so that you will stick to your plan.
  1. Test and tweak your plan: Use a demo account to test your plan. Trade using that plan and see what works and what doesn’t.  Learn from the successes and from the losses.  Tweak your plan to use more of what is going well and less of what is not.  Keep trading using your demo account until you are completely confident in your trading plan.  Make sure your plan withstands the test of time.  See how your trading plan would have performed over a long period of time in the past.
  1. Start Small: You can always increase your portfolio but once you lose large sums it can be difficult to bounce back. Once your account grows organically from your profits, you can reinvest those profits without increasing your deposit.

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