Trading in the forex market requires discipline, strategy, and a clear set of rules to navigate the complexities of the financial landscape. Over time, I’ve developed a set of personal guidelines that keep me focused and help me make consistent, rational decisions. Here’s an in-depth look at my trading rules:

1. Trade with the Trend

The trend is your friend in forex trading. By aligning your trades with the prevailing market direction, you increase the probability of success. Trading against the trend is akin to swimming against a strong current—possible, but exhausting and often unproductive. Before entering any trade, I always identify the dominant trend, whether it’s bullish or bearish, and ensure my trades are aligned accordingly.

2. Maximum 2 Trades a Day

Overtrading is a common pitfall for many traders, often leading to impulsive decisions and significant losses. By limiting myself to a maximum of two trades per day, I maintain focus and discipline. This rule prevents me from chasing the market and forces me to be selective, only taking trades that meet all my criteria.

3. No Confirmation, No Entry

Confirmation is key in forex trading. Entering a trade without proper confirmation is like jumping into a moving river without knowing how deep or fast it is. I wait for strong signals that validate my analysis before entering a trade. Whether it’s a specific candlestick pattern, a breakout, or a moving average crossover, I don’t make a move until I have clear confirmation.

4. Never Chase a Trade

Patience is a virtue in trading. When the market moves swiftly, it’s tempting to jump in and try to catch the wave. However, chasing trades often leads to poor entry points and higher risks. If I miss a trade, I simply move on and wait for the next opportunity. There will always be another trade.

5. Don’t Trade in Choppiness

Choppy markets—where prices move erratically with no clear direction—are a trader’s worst enemy. My rule is simple: if the market is choppy, I stay out. It’s better to preserve capital than to risk it in uncertain conditions.

6. Don’t Look at the Profit/Loss

Focusing on profit and loss during a trade can cloud judgment and lead to emotional decisions. Instead, I concentrate on executing my strategy flawlessly. The profits will follow naturally if the strategy is good. By removing the emotional attachment to the outcome, I stay objective and make better trading decisions.

7. Always Have a Plan

Every trade I enter is based on a well-thought-out plan. This includes entry and exit points, stop losses, and profit targets. Having a plan ensures that I’m prepared for different market scenarios and helps me avoid making impulsive decisions.

8. Ignore Others’ Analyses

The forex market is filled with opinions and analyses from various sources. While it’s good to stay informed, relying on others’ analyses can lead to second-guessing and confusion. I trust my own research and analysis, which are based on my trading strategy and experience. This way, I stay true to my trading plan and avoid the noise.

9. Feel Emotional? Don’t Trade

Emotions are the enemy of rational trading. Whether it’s fear, greed, or excitement, trading while emotional often leads to mistakes. If I’m feeling emotional for any reason, I take a step back and avoid trading. It’s better to sit out and miss a trade than to make a decision clouded by emotions. During the first trimester of my pregnancy, I found myself more emotional and hormonal than usual, which made it difficult to stay focused and make clear-headed decisions. Recognizing this, I decided to step away from the markets until I felt more emotionally stable. It was a tough decision, but I knew that trading in that state would only lead to poor decisions and potential losses. Taking a break allowed me to prioritize my well-being and return to the markets with a clearer mind when the time was right.

10. Learn from Every Loss

Losses are inevitable in trading, but they’re also opportunities to learn and grow. After every losing trade, I review what went wrong and how I can improve. Was it a mistake in analysis? Did I ignore my rules? Learning from each loss helps me refine my strategy and become a better trader over time.

Conclusion

These trading rules are more than just guidelines; they are the pillars that support my trading success. By adhering to them strictly, I maintain discipline, minimize risk, and increase my chances of long-term profitability in the forex market. Trading is a journey, and these rules are my compass, guiding me towards consistent success.

This took me years to perfect. Following these rules is more difficult than learning how the markets work; it requires a lot of mental and emotional discipline. I admit that I don’t always follow my rules—I’m not perfect—but I always keep them in mind every time I enter the markets. Almost every week, my husband and I review what we did wrong, the rules we didn’t follow, and why. We make ourselves accountable and always strive to learn and get better. This ongoing process of reflection and improvement has been crucial in helping us grow as traders.

by Vanessa Vasilache