1. Open a demo account and learn to trade it first before “going live” with real money. You will usually learn how to avoid some mistakes and also get familiar with the broker’s trading platform before you have hard earned money at risk.
2. Start out with a “mini account”. Many traders seem to want to start off with a “standard account”. However, this is the quickest way for the new trader to lose money that I know of. The “trading size” is so large (in number of currency units controlled) that if you are wrong, you are bad wrong! In fact, a standard account would cause 10 times the losses that a mini account would cause on the same exact trade.
3. Start off trading small. By that, I mean to trade one mini lot per order at first. Start off with only one order in the market at any one time. Once you get profitable with that, then you can increase your lot size. However, if you can’t make money with a one mini lot trade, you wouldn’t have made money with 5 mini lots at risk. In fact, your loss would be five times bigger.
4. Risk ONLY 1-5% of your account balance maximum
5. Start off trading the most liquid pairs out there. These will be the ones with the smallest spreads between the buy and sell quotes. This will be pairs like EUR/USD, USD/JPY, GBP/USD, USD/CHF, EUR/CHF, etc.
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