Step #1
Have faith in your trading system. If you're using a method which you don't trust, you won't be able to work properly with it and will make many unnecessary trading mistakes. If you're getting a new method, make sure to test it thoroughly until you're positive that it works as it should. Use a demo account at first and only then proceed to trade real money.
Step #2
Whenever you're placing a trade, consider the most you can lose. You can control this by placing Stop Losses. Always make sure that no single trade can make you lose a large part of your account. Even if this seems like a sure win trade, you have to spread your risk among as many trades as possible to be sure you're not exposing yourself too much on a single or too few trades. A big loss can take a lot of profitable trades to make up.
Step #3
Don't follow a trade. If you want to make sure that you don't expose yourself to too much risk, place a Stop Loss price for each trade and leave it be to run on its own. Don't follow it to see how it progresses. This is inviting trouble because you're allowing tension and fear to influence your actions and decisions. You're using a Stop Loss so the trade can run on its own.
Step #4
Leverage is the enemy of most traders because they only see the good that it can do and not the inherent risks of it. Winning a trade with high leverage can certainly be sweet, but losing one can be horrific. One of the keys of currency trading risk management is to limit your leverage to make sure you're not exposed to big losses due to small shifts in market prices. Use a leverage that is small and reasonable.
Do all that and you will be able to control risk in currency trading.
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