As a speaker and author, I’ve been privileged to meet thousands of people at investment conferences worldwide. Inevitably, the one thing most of them ask me is, “How do I get started in trading foreign exchange?”

My initial response is always to caution them that forex trading is far more difficult than they probably realise. Many people believe trading is “easy money” – I certainly did early on, before I earned the experience to know better.

If an inexperienced trader can appreciate and accept this fact right from the start, they are more likely to approach trading with a greater commitment and be prepared for the challenges that it presents.

Many of the things I now accept as “the rules” of forex trading are things I wish I knew when I first started. Chief among them:

• Be humble — you will not get every trade right. In fact, the market will prove you wrong often. Thinking that you’re right all the time is a form of self-sabotage.

• Be committed — trading is difficult. It takes time and practice to reach a reasonable level of competence. Like any challenge you face, a half-hearted attempt will get you nowhere.

• Educate yourself — save yourself money and stress by learning how to trade from someone who has come before you.  Attend trading workshops, webinars, read books and do your homework.

• Be patient — success will not happen overnight. If you consider trading a life-long endeavour, it really doesn’t matter if it takes you a few years to do it profitably.

• Keep it simple — people have a tendency to overcomplicate matters and develop intricate solutions to problems. When we accept that trading is difficult, we may think only a complex solution (i.e. trading plan) will work. In trading, however, simple actually does work. The simpler the plan, the easier it is to follow.

• Be realistic — it’s good to challenge ourselves and work hard to succeed. But be wary of setting unrealistic goals for how quickly you progress as a trader, or how much profit you make. False hopes can be devastating. It is vital to set yourself trading goals that are measurable and realistic.

• Focus on the right things — most people focus too much on their entry signal. It’s better to keep that part simple and instead, focus on position sizing, setting exits, and preparing your mind for successful, disciplined trading.

• Always protect your capital — most new traders focus on making money, not protecting it. But in trading, the best offense is a strong defense. Learning risk management is essential to long-term success.

It’s not obvious how to master a skill like forex trading. One must invest time and effort to learn the fundamentals, or else drift down the path of so many failed traders – the path of frustration, emotional stress, and almost certainly lost money.

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Stuart has more than 16 years of trading experience under his belt and specialises in technical market analysis of major currency pairs. Apart from being the author of several bestselling trading books, with his most recently released book Trading in a Nutshell, Stuart contributes to daily newletters and blogs. He also produces articles and videos on the how tos of technical tradings. For more information of Stuart, you can follow him on twitter @stuartmcphee or check him out on Google+.