The world's forex market is the largest financial market throughout the world and sees an average $4 trillion in daily trades. Forex is a very popular and traders of all levels of ability are attracted to it from those that have never traded before to some with many years' trading experience. As you have the ability to achieve significant and cheap leverage and trade continuously forex is seen as an easy way to trade. You can also lose money easily. The purpose of this article is to delve into 10 ways that traders will be able to stop making losses in a market that is as competitive as the forex market.

1. You Should Know What You're Getting Into - Homework Before Trading
Just because forex isn't difficult this doesn't mean that you should skip the research. To learn about forex is essential if a trader wants to be successful in the forex market.
The bets way to learn about trading forex is to actually do so but this is not reason to not learn about the political and economic climate of the currencies that the trader deals in.
As events are constantly happening, keeping up with what's going on becomes the trader's homework, as they need to be flexible to how the market, regulations and the world will change.
One way to do this will include developing a trading plan. (10 Steps to Building a Winning Trading Plan is a good guide).

2. Get A Well-Recognised Broker On Board
Due to the lack of oversight of the forex market, you can wind up with a poor broker dealing with your affairs.
To protect yourself go for a broker that holds a registration with the U.S. Commodity Futures Trading Commission (CFTC) as a merchant in futures commission and has membership of the National Futures Association (NFA)..

Regulatory bodies will exist in every country outside the U.S. and likewise the decent brokers will hold a registration with them.
Every broker will have their own account offerings and every trader should carefully consider factors such as initial deposits, withdrawal policies, leverage, commission, spreads and account funding policy.
Any good customer service representative will be able to answer questions about the services and policies of their company.
(For help with choosing a broker, look at 5 Tips for Selecting a Broker.)

3. Make Use Of A Practice Account
Pretty much all the trading platforms will offer up a demo account or simulated account for you to practice.
This allows traders to practice trading without using any of their own money. This gives traders the advantage of practicing their order entry without risking their own cash.
It is common for novice traders to press the wrong button when closing or opening a position and this is one of the most damaging issues when starting.
Many novice traders place more money into a losing position they meant to close. Order entry mistakes can result in a number of large and unprotected trades.
The financial damage is considerable and the stress equally so. So practicing your trades before you start placing orders using your own money makes a lot of sense.

4. Charts Should Be Kept Clean
With all of the technical analysis tools that the trading platforms have on offer there is a huge temptation to use all of them when opening an account. You can use a lot of these tools to trade forex but to maximize effectiveness it is best to minimize the number of technical analysis tools used.
You can even end up with conflicting signals should you use two of the same type of indicator such as volatility indicators or oscillators. These should be avoided.
If you notice that you stop using some indicators to improve trade performance then you are better off removing them from the chart.
Additionally, the general appearance of the workspace of the chart should be taken into account when adding tools to the chart. The trader's reaction to market changes can be affected by how easy a chart is to read and analyze so think about this when choosing lines, bars, candles, fonts and colors.

5. Your Trading Account Must Stay Protected
The main drive in forex trading is of course making money but avoiding losing money is vital. You must become equipped with a sound money management technique if you are to trade successfully. The seasoned trader will say that entering a trade at a certain position and making money is possible but how you get out of the trade is what counts.
The skill with this is understanding the point at which you take a hit on your losses and moving on with the next trade.
A protective stop loss is a very good method of ensuring that losses stay reasonable and so should always be used.
Traders will also have use of a maximum daily loss amount above which positions will be closed and will prevent any trades until the next day.Protecting profits is equally important as plans for stopping losses.
A money management technique that can retain profits while letting other trades grow is called a trailing stop.

6. When You Do Go Live, Start Small
After a trader has tested and completed their plans, practiced on the demo account and researched the market, they can go live with their own money.
All the practice in the world does not prepare you totally for real-time trading so you should always start with small amounts.
It is only when you trade live that you will get to understand slippage and how you react emotionally.
Furthermore, you might have a great plan that you developed when practicing but may not work well in a live environment.
A trader can assess the effectiveness of their trading plan, assess their own responses and improve their order entry skills without losing all their money immediately by using small amounts.

7. Reasonable Leverage Should Be Used
The amount of leverage that can be used when trading forex is unparalleled.
Generating large profits with small investments, sometimes as low as $50, is a big reason that forex is such an attractive option.
There is significant growth potential when leverage is used properly but there is also the chance for equal losses.
Leverage can be controlled by a trader by basing the size of the position on the account balance. As an example, a forex account with $10,000 to a standard lot of $100,000 gives a 10:1 leverage.
This gives the trader the ability to have a larger position opened through leverage maximization but reduce risk using a smaller position. (Adding Leverage to Your Forex Trading provides more information on this subject.)

8. Good Records Should Be Kept
A very effective way to cement any learning from successes and losses in forex trading is to maintain a trading journal. By noting down the various profits, losses, instruments used, dates, emotions experienced and performance of the trader you will have a record. This can all be very helpful in making a trader successful.
By regularly reviewing this feedback a trader can use it to improve their learning.
Albert Einstein has been credited with saying 'insanity is doing the same thing over and over and expecting different results'.So how can you be sure you're not just repeating the same processes and getting the same outcomes if you have no idea what you have done previously?

9. You Must Understand The Treatment and Implication of Tax
From the point of view of paying your tax bill, you will need to know how forex trading is affected. See a tax specialist or accountant who can advise on this point and advise you certain laws that might benefit you. Tax laws are changing constantly so this is one area in particular to stay up-to-date on.

10. Trading Should Be Treated As a Business
To see your forex trading like it was a business can ensure you don't get distracted by any short-term losses or profits and focus you longer-term.
This can help traders manage their emotions and in the same way a standard business will incur expense, taxes, losses, risk and uncertainty, so does trading.
Likewise, very few businesses are successful overnight and this applies to forex trading.

By setting out some realistic goals, being organized, planning and continuing to learn, as much from failures as you do from success, you should be able to enjoy a successful and long trading career.
The Bottom Line
A lot of traders find the world's forex market attractive as it offers access to high leverage levels, low account requirements and constant trading. If viewed as a business, you can have a profitable and rewarding career as in forex trading. A final few tips to help traders from losing money are:
* Be as well prepared as possible
* You need to be patient and disciplined when you study and undertake research
* Use robust and sensible money management techniques
* Take the view that trading is a business