We have already considered the importance of limiting risk by beginning with a forex trading system with relatively small amounts of money. This has the additional advantage of taking pressure off you, because the less you have in the market, the less you risk losing. It is therefore important to have only a small actual cash deposit with the broker, and for there to be proper instructions on limiting exposure when trading on margins.

Movements in the market should be thought of in “forex pips” or “forex points”, not in cash terms. You must train yourself to think in these terms, and to forget the amount of money you may be making or losing when the market is going up and down.

Understand that the more you ‘will’ the market to do something, the less likely it is to do what you want. Emotional trading almost always goes badly, and you therefore spend an inordinate amount of time and emotional effort on willing the market to do what you want. Stop trading emotionally (or even better, don’t start), and this problem will go away.

It is therefore very important to follow a proper forex trading system.

You are the boss of your business, and every decision that is made in that business is made by you. Do not therefore start blaming everyone else when things go wrong. If you have followed your forex trading system, and the market turns against you, then that is an inevitable cost of doing business. If, however, you did not follow your forex trading strategy, then it is entirely your fault that you are in the market in the first place when you clearly shouldn’t be.

When you are first starting out, it is natural that you will be extremely nervous, especially when you move from trading a demo forex trading account to putting real money into the market place for the first time. You will therefore be tempted to sit and watch every market move like a hawk, willing the market to do what you want it to do. If you do this, you’re probably getting too close to the action, and you are certainly getting too involved.

Take a step back, switch your computer off and go and do something else for a couple of hours. Once you are in the market, then as long as you have an order in place for taking profits, and a stop loss to limit your expenses if things go wrong, there is nothing you can do by sitting staring at the screen. Turn it off and go do something else – it will be far better for your blood pressure, and it will probably be far better for your margin account balance as well!

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