Trader Best Practices

The Trade

• Always start with a Demo account and get a feel of the trading software and its features.
• Use the demo account to try various strategies and adopt the one(s) most suitable to your trading style.
• Choose and get familiar with a currency pair(s) that suits your style of trading.
• Decide on the duration of a trade (scalp, intraday, swing).
• Decide on your stops and limits; exits are as important as entries.
• Write down your rules, and abide by them.
• Keep a journal of your trades.
• Take the time to learn and practice. DEMO. DEMO. DEMO. At least for six months, a year would be better.

The Journal

• For what reason was the trade entered? What type of analysis was used?
• What time frame was used to enter the trade?
• What are the prices at entry and exit?
• What is the risk : reward ratio?
• Is this particular strategy working?

Safeguard your money

• Trade only with money you can afford to lose.
• Start your live trading with sufficient capital and as little leverage as possible. Keep your trade sizes small.
• Don't over-trade. That means opening too many positions and/or using too high a leverage.
• Never use more than 3% of your margin; 2% - 3% is the ideal.
• Keep in check: greed, fear, stress, anxiety. Trading small can help.
• If your discipline has earned you winning trades, it's time to bump up your lots. It's reward for your patience.

The Trading Software

• Make sure the trading software is free, demo or live.
• Make sure the trading software has all the features you need to trade efficiently.
• Is it reliable? Can it provide instant access to the market? Are there delays in orders and data delivery?
• Does the software allow for installation of a certain indicator(s) vital to your trading strategy?
• Check out the forex forums for user-feedback on the different platforms.

The Broker

• Check if the broker is regulated.
• Check if the broker provide for your special needs. For example, does it offer a shariah-compliant account?
• Make sure the broker is always there to help by providing 24-hours helpline by e-mail, phone or online chat.
• Check the type of platform the broker provides.
• Demo the platforms of several different online forex brokers before going with one.
• Check out the forex forums for feedback on the different brokers.