Have a Plan

• Perhaps the greatest piece of advice shared by forex traders with beginners is to developed a focused strategy and stick to it. Strategies vary greatly, including time frame (day trading versus long-term investing) and orientation. Some traders follow fundamental signals and news, while others closely study technical charts. Most importantly, know your strategy and work it with discipline. Remember, emotions are the enemy of profitable forex trading.
  
  

Take a Break

• Part of controlling your emotions in forex is to force yourself to step back at certain times. Forex is a virtual 24/7 marketplace, yet trying to trade in it 24 hours a day is unwise given your body and mind's need for rejuvenation. Another reason to step back from active trading is you need time to consider your moves, and to evaluate your strategy and recent trades. Trying to make importance macro decisions on trading in the midst of actively trading is difficult. Many novice traders feel compelled to always have an open position in the currency market.
  
  

Set Tight Limits

• A major part of a disciplined approach to forex trading is the placement of tight stop-loss orders when you enter positions. Entering any forex position without an exit strategy (for profit and loss) is a huge mistake. This is what leads traders to major losses on one bad trade. Do not risk more than 2 percent to 3 percent of your account value on one trade. This means placing a stop-loss order to limit your losses to that predetermined amount just above (on a short) or below (on a buy) your entry point.
  
  

Consider Time of Day

• An often overlooked aspect of strategy in forex is deciding what time of day to actively trade. Long-term investors in forex are likely less concerned with this factor, but day traders or short-term traders often look for more active trading periods. Two major forex markets overlap for two trading hours twice each day: Asia and Europe overlap from 2 a.m. to 4 a.m. Eastern time, and European and U.S. markets overlap from 8 a.m. to 12 p.m. eastern time. These present more active trading periods.
  
  Additionally, consider your approach to trading during highly volatile post-news announcement periods. Some traders prefer to avoid trading immediately before and after important economic events because of high unpredictability.