This article is indeed a good start point: Become a Profitable Forex Trader in 5 Easy Steps
Go for the long haul: You must have heard the old adage, a rolling stone gathers no moss. Don’t get into the market for short-term gains. Focus for the long-term. Find out how the markets have performed over an extended period and fix your goals for future trade accordingly. Set an individual target, say for five years or six years and work your way accordingly. Focus is primary and even though you might have a long window before recovering your money, but daily study will give you a broader perspective.
Avoid technical jargons: Unless you are a professional trader, avoid getting into technical trade for your long term investments. Not just the jargons like stop loss, margin trading could overwhelm you but insufficient knowledge about the technical trends might also lead to severe losses. Do not trade your real money if you are not professional and experienced enough in technical analysis. A lot of traders might tempt you for some quick gains but remember no pain and no gain. Technical trading as well trading in the Futures & Option segment requires enough knowledge and experience, analysis and shrewd strategy. Most of regular salaried people do not have the bandwidth for that kind of detailed dissection of the market and also the know how is scant. In that event you are more often than not at the mercy of the broker who could have vested interest in recommending a certain trade.
Systematic investment strategy: If you devote daily attention and make small tranches of investment on a regular basis over a period of time, your returns are guaranteed. Also in this way you do not put all your eggs in one basket. It surely pays to keep a diverse portfolio that can help you hedge losses in one sector with the gains in another. A diverse approach also gives you an exposure to varying degrees of economic and geopolitical factors. Sometimes certain local factors can bring about big moves, so by systematic investment you don’t block a huge sum in one go.
Look for blue-chip names: Be it in stocks or in the forex market, go for well traded names. Don’t invest in small stocks or scarcely traded currencies as even the smallest loss at Index level could trigger huge losses in low base entities. Also smaller names at times carry the risk of potential insider trading which the common investor might not be aware of and as a result get into huge loss. Another advantage of going for big names is they are extensively followed, well tracked and analyst views are easily available to chart future growth prospects.
Follow broker recommendation with caution: Don’t follow your broker blindly. Remember that he/she makes money in every trade that you conduct and profit motive is a primary driver for them. While your profits do translate into gains for them but your loss might not be theirs. So, it is very important to do a background check and know what investment would translate into gains for you. While your broker can give you a broad direction, don’t depend on them for the nitty gritty.
Follow the ETF route: If you are risk averse or do not have the necessary risk appetite to invest in stocks or forex directly, go for ETFs which reflect the value of the underlying stock, index or the currency. The beauty of an Exchange Traded Fund is helps you take advantage of the market movements without the associated risk of direct stock or currency trade. It helps you create a balanced portfolio with minimum risk. They are also cost effective, gives you tax advantage, gives you flexibility and has a much higher degree of accountability.
Therefore next time the market slumps, don’t thank your lucky stars that you are not in there. Rather put on your investment cap and fish for some value buys. Look at stocks with assured returns over an extended period, how they have been performing over a period of time and how you can take advantage of a slump to get some good bargains. It is very important that you treat stock or currency investment just like other more traditional investment instruments. They are no magic wands. Long-term gains are only possible through sustained and focussed investment. Of course, the advantage is you end up creating a lot more money through stock and forex market investments Vs traditional tools.