Money Management

The foundation upon which any successful Forex trading strategy is built is strong money management. You need to play strong defense first and protect what you have above all else when using leverage and even a good Forex trading system will lose if money management isn’t tight and solid.
In terms of money management always do the following

• Do not over leverage positions – this wipes out more trading accounts than any other single reason.
• Never place mental stops, place them as soon as you placed your trade, so you are not tempted to run losses.
• All trades are equal and never make the mistake of calculating your risk reward as your target minus your stop, it’s simply an assumption. Always assume the worst first and things can only get better! In terms of risk all trades are equal.
• When placing stops, make sure you fully understand the implications of standard deviation of price and volatility and place your stop outside of random volatility. The subject of volatility should be an essential part of any traders Forex education.
• Don’t trail stops to quickly or to closely, you need to take open equity dips to make big gains. Most traders try and restrict risk so much they create it and never hold long term trends. You need to accept open equity dips short term to make big profits long term.  
• Don’t just manage individual trades, manage your overall account equity and make sure you adjust risk reward, in terms of how you are doing overall on account equity growth.