When it comes to Forex trading, psychology of the trader plays a very important role in money management.

One must work upon certain principles during Forex trading:

Trading with sufficient capital

Exercise Discipline

Risk taking ability of the trader

First of all, you must have sufficient amount of money to start a Forex trading business. Then you should take into consideration your risk taking ability. You must under no circumstances risk more than 2% of your account stability on any Forex trade. A maximum of 10% may be just enough if you are looking for more but never beyond that. You must be always prepared to lose. Keep your gains big and losses small and try to do your entire trading focusing on this particular idea.

You should maintain proper record of your gains and losses. This will help you to analyze your trading strategy and whether you are taking the right move, else you can start all over again by building a new strategy. Without keeping a track you will never understand how and why you have incurred a profit or a loss. Exercising this discipline is of utmost importance to be a successful player in Forex trading.

Forex brokers generally provide Forex demo account, wherein traders can trade in real time but with false money. Nothing is at stake here, as you do not deal with real money. However, this is an excellent method to test your skills before you actually plan a strategy and take the plunge!