It is as important that you know the don'ts of Forex trading as it is that you understand the dos. If you only focus on what you should do, you can easily fall into the mistakes others have made before. Instead, read this article and learn from those errors so that you don't repeat them in the future.
Don't believe that Forex can be your only income. If you rely totally on this market and you end up losing all of your money, you will be left destitute. Instead, trade with extra money you happen to have that won't bankrupt you if you lose it. For example, don't trade with your retirement savings, but do trade with the $100 Grammy gave you for your birthday. If you consider how you would feel if you literally burned the money, then you will understand if it is truly extra or not.
Don't become competitive with other Forex traders. While a little competition can be fun when it is friendly, the market isn't stable enough to believe that success there is a sign of proficiency at trading. While Bob might have made more profit than you in the last week, next week you might cream him. Never let your comparisons to other traders affect your self-image. As long as you follow your rules and do your research, you are just as good of a trader as anyone else doing the same.
Don't focus on the trades themselves, instead focus on signals. These are found within the charts which tell you about how the currency is performing. Once a trade has been placed based on your analysis of a current trend, you need to follow the rules you set for it. For example, when it hits the maximum you stated you would pull out at, do so. The same goes for the minimum, saving you from losing more money. Signals are what will tell you which investments are sound and which are not.
Speaking of your rules, never break them! Whether they are the maximum and minimums you have to quit at, or even the number of hours you are willing to invest in research, don't break your rules. You set these rules to ensure you don't lose your shirt or your mind, so they must be followed. The more strict you are, the better your trades will go and your strategy will end up working for you. If you follow your emotions instead of your mind, you will always be left with nothing.
Even when you think you are on a roll, don't become overconfident. A trader who becomes emotional, even if that emotion is pride, will fail. You have to remember that the market is fickle and your research is all that stands between you and losing everything.
Now that you deeply understand what not to do, you can focus on what you need to do. Start your planning and set up a demo account so you can get a feel for the market. Once you are comfortable with the strategies you have built, put them into action with real money. The outcome will be the great success you have always dreamed of.