Risk

Never risk more than you are willing to lose. While an experienced trader can often profit from the market, forex trading is still speculation, and you could incur significant losses. But, Reading the guides on this site and Easy-Forex will set you on the path to becoming a profitable trader.

Also, do not over trade. One of the most common mistakes new forex traders make is leveraging their account too high by trading larger sizes than they should. Leverage is a double-edged sword. Just because one lot (100,000 units) of currency only requires $2,000 as a minimum margin deposit, it does not mean that a trader with $10,000 in his account should be able to trade 5 lots. One lot is $100,000 and should be treated as a $100,000 investment and not the $2,000 placed as margin.

Most forex traders correctly analyze the charts and place sensible trades, yet they tend to over leverage themselves. Because of this, they are often forced to exit their position at the wrong time. A good rule of thumb is to never use more than 10% of your account at any given time.