There are many different trading rules that you need to follow in Forex. One way to look at these rules is as promises to yourself and other traders. These promises should be followed and made to the best of your ability. Failing to do so means breaking your promise to yourself or other traders, which can affect how well you trade in future.
Forex trading rules
Here are some simple Forex trading rules that every trader needs to follow.
Never go against what your account is telling you.
All Forex traders need to follow one rule: never going against their own account’s signals (unless using a system like a martingale). This rule exists because no matter how confident you feel about an upcoming position, if your account balance says that you should not be trading at all, then you must not trade. The only way to become a better Forex trader is by listening to the signals given by your own account and doing what it recommends.
Always follow the rules laid out in your trading plan.
Every Forex trading plan comes with a set of rules that govern how you manage each position, as well as your overall strategy for entering and exiting positions. These rules exist because they have been stress tested over time, so following them ensures that you maximise profits while minimising risks. Any rule from your trading plan that is broken could render the entire document useless, which would result in losses for you.
Do not second guess yourself.
When trading, you are bound to have emotions telling you to do the opposite of what your common sense is saying. These emotions can come in greed, fear or even excitement, and they all tell you to take a specific action. What matters most is that you ignore these emotions because second-guessing yourself will not produce positive results. You must keep this one goal in mind at all times: always strive for maximum profits with minimal risks.
Have faith in yourself.
Forex trading demands confidence in your strategy and abilities, so never lose faith when placing trades. If the market moves against you despite having made an educated analysis before entering a position, it should be viewed as part of the game rather than something out of your control. Going against the market flow could result in losses, but that is perfectly fine if other Forex trading rules are followed throughout.
Do not take advice from others.
One rule that many successful traders follow is to never rely on advice other than their own to place trades. This should be obvious because no matter how good someone else’s strategy is, it will never fit your account balance or personality. As such, you should only use strategies and ideas that come from your testing, which means following tips blindly will not do anything for you.
Trading forex in Germany
Trading is regulated in Germany by different agencies within the government, which ensures fairness among traders. All brokers must adhere to stringent measures when providing financial services to clients. This includes ensuring the safety of client assets.
The rules in Germany include price per lot or currency pair, margin requirement, trading hours/currency pairs that are allowed to trade during these times, commissions and other charges, other fees that may be applicable, trading with a credit card or debit card through this broker must compensate for any losses.
The best Forex trading rules are the five listed above because they help avoid unnecessary losses when trading. They can improve your odds of success significantly if used correctly. Trading in currencies can be done either through an online forex broker germany or by doing it directly between two parties. New investors are advised to use a reputable online broker from Saxo Bank.