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One of the biggest problems I had when I started trading was simply trusting the information that was given to me. You hear plenty of cliches, some contradictory, such as "trade with the trend, never try to catch a top or a bottom, trail your stops, use a fixed money stop, put your stops below a swing low or above a swing high, you never go broke taking a profit, add to a winner, never let a profitable trade turn into an unprofitable trade, never average down, always go for 1:2 risk reward or greater, when you've been trading bad take a break, when you've been trading bad  you should keep going because you're about to become profitable" and my favorite, "learn to swing trade before you day trade, avoid the 1 minute chart".

As I go along my learning curve, I have seen many if not most of these hard and fast truths challenged successfully and learn of traders who are profitable by doing this.

One of the biggest mistakes I made was trying to put these rules on artificially.

I remember trying to day trade with a 1:3 risk reward, that fabulous risk reward ratio where you can be right just 30% of the time and still be in the black. The problem is that currencies don't move that way on an intraday basis! You're lucky if you can swing a 1:2 risk reward in such scenarios - usually my setups are very close to 1:1. Sure you can frustrate yourself going for 1:3, enduring multiple stop outs and missing plenty of entries. Is that going to make you more profitable?

Then there's the big mega rule, "trade with the trend", especially for you, beginner! Sure, I'll agree that this makes sense sometimes. I've certainly gotten in trouble getting in front of the train as opposed to hopping on board. The problem is that there is a contradiction here: either you buy strength, which can often mean buying the top (what about those voices that always tell us "don't chase"?), or you buy weakness (get in on the dips), which can be the beginning of a reversal. Care to pick a Fibo level or speculate on moving averages?

The other problem is that its rare a breakout move goes straight up like in a technical analysis textbook (and in fact, nothing ever seems to happen like in the textbooks!). There is plenty of backing and filling, and stop gunning expeditions. Do you stay in and hold, exit during the dips, add during the dips? When? Why? 

Personally, I like the idea of counter trend trading. Why? Because when everyone realizes their wrong, the reaction is often very quick and price can quickly go in your favor. I know because I've been on the other side plenty of times! That means you have to also be very swift and get out if you get caught on the wrong side. Failure to do so will hurt you badly. Don Miller trades counter trend and does very well.

Lastly, my favorite of all time: don't begin by day trading. I'll admit initially I chose day trading for the wrong reasons - I thought it was the best way to make a lot of money fast. My argument was that there was a greater amount of opportunity and that would translate into more profits.

I've learned that this is not necessarily so, you can trade longer timeframes and also do very well. The trick is to find the greatest amount of high probability opportunities. Long term traders have to be involved in multiple markets usually to reap a good amount of opportunities, day traders by comparison can focus on just one instrument like the index futures or our friend the Euro. 

That said, I've realized that day trading best suits my personality. I like things to happen fast: in, out, done. I hate the idea of having to nurse a trade over the course of several days, when there is too much uncertainty over macroeconomic events. In fact, according to an article by Boris Schlossberg (Ignore Fundamentals in FX at Your Own Risk), a hedge fund that did statistical arbitrage and studied the FX market concluded "price loses as much as 70 percent of its directional bias within 24 hours of any point in time and within 48 hours turns essentially random." At the same time, Irene Aldridge in "High Frequency Trading" shows a study of the EUR/USD, revealing that at the 1 minute level price has its greatest inefficiency (meaning opportunities for trading).

Here's an example of what I'm talking about:

As Table 7.2 shows, maximum Sharpe ratios increase with increases in trading frequencies. From March 11, 2009, through March 22, 2009, the maximum possible annualized Sharpe ratio for EUR/USD trading strategies with daily position rebalancing was 37.3, while EUR/USD trading strategies that held positions for 10 seconds could potentially score Sharpe ratios well over the 5,000 mark.

A Sharpe ratio of 5000 is something quite extraordinary. Granted, this is the domain of HFT boxes, which are programmed with complex econometric models created by math PhDs. Such trading strategies can be extremely profitable but also are very short lived due to the competition out there. Still, it illustrates my point about inefficiency at lower time frames. 

To show more evidence of my point, consider this post on Babypips, where a scalper who focuses on the EUR/USD (shooting for 3-5 pip targets) talks about why he does what he does:

I've tried larger timeframes and it just didn't work for me, just like scalping doesn't work for some people. That's what bugs me when people say scalping doesn't work and you'll lose all your money. That is true for some people. If I believed that and stuck to the higher timeframes I would have lost all my money but I know that works for other people. You have to find a style that fits your personality.

In the end, the market doesn't care if you're trading with or against the trend, whether you are a fundamental or technical trader, whether you scale in and scale out or go all in and go all out. In the end, the right thing to do in trading is whatever method you can effectively manage that has long term positive expectancy, which must interplay with your personality. That's all there is to it. The rules you work with shouldn't be just blindly accepted at face value, you have to prove to yourself that they are effective. Trading is all about adapting, and there are few things more destructive to your account than trying to artificially curve fit a market to rules that may not work for you or for the trading opportunities at hand.