All traders have and will have experienced periods of continuous loss. It is an indispensable part of the trading career. But if you lose so much, it is time for you to review your Forex trading strategy and take responsibility for those bad results.
No doctor will be able to “fix” your problems and errors right away or help you instantly make money in the market. However, I do have suggestions for steps to get you back on track. This article is for you to end a long series of losses and make a step towards making a profit on a very recent day.
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7 steps to do when you lose in Forex
Acknowledge that you are the main part of the problem
Our greatest enemy is ourselves. When you were born and raised, we have experienced a lot of different emotional states such as greed, fear, hope, regret, etc. All of them are basically what makes you lose in the Forex market.
So for the first step, you need to understand that you are the cause of the failures. It is not because of the broker, or because recently the world has been too erratic.
We need to master and control ourselves if we want to be a successful trader. This is a really hard thing for everyone. So most people who trade in the foreign exchange or securities market always go home with empty wallets.
When you understand this, through a reasonable trading strategy and discipline to implement the set principles, we can gradually control ourselves and effectively trade.
Take a break for a while, temporarily stay away from trading
The next thing you need to do to “fix” the serial losses is to stop trading for a while. I’m sure you have thought about this. However, most people will trade more and more, even when they still lose money and still burn out their Forex accounts. They only stop until they decide not to enter this market ever again.
This step to accomplish is also very difficult. But this is where you need to stop to see everything to avoid losing control of your emotions. From there, you may know what you are wrong, how to fix it, etc.
You can also trade with a demo account, which is also a good way to keep a feel for the market. Always look at reality, accept it and you will be on your right track.
Become a “boring” trader is a useful way to get rid of loss in Forex
Boring is one of the essential elements of trading. I have had a separate article about this. You can read it here.
Trading is not a walk to the mall, the entertainment hall, or the casino. You should not feel excited, impulsive, or full of emotion once you observe the market movements.
You should plan each order. It may lose or win, but it is not allowed to surprise or shock you. It is all about logic. You know and have accepted the loss or profit of each Forex trading order (by stop-loss and take-profit). Nothing makes you excited here at all.
Be more consistent and confident with your trading strategy
If you are having a long losing streak, you probably don’t have the right approach to your trading job. This goes hand in hand with my suggestion about trading boredom. Basically, you need to establish a trading habit in the long term. There should be no significant changes in the next few weeks, months, or even years.
Every day, you spend a certain amount of time observing the market, identifying trends, resistance/support levels, good candlestick signals if any, and so on. Without the appearance of a good chance, turn off your computer and wait until the next time to turn it back on.
Repeating these consistent habits in your trading strategy will help you avoid a lot of emotional impacts. You can keep your mind clear and have an objective perspective. Thereby you can avoid loss and mistakes when trading Forex in the long run.
Know your level of risk
For each of us, we have different levels of risk. No one is alike. How much will you accept to lose for a losing Forex order? If you can’t answer this question, this is one of the big reasons you are in a constant loss.
Successful trading is about managing your risk well. Many traders ignore it and don’t focus on it. Instead, they often think about how much money they can make. You must become a successful risk manager before becoming a successful trader.
Do not risk too much (compared to your balance) or especially without a stop-loss. If you are trading without a good sleep every night because you fear to lose that amount, then that means you will lose money very quickly.
Many people have very high winning rates, but with only 1 losing order, they could empty their accounts. Place orders with the amount in stop-loss that makes you comfortable. Do not go greedy to trade big to make a big profit. You can trade for the rest of your life. If you want to be fast, you must take it slowly.
Don’t look at low time frames
You should not (or cannot) impatiently seek trading orders anytime and anywhere. If you do, you’ll drive yourself crazy and burn out your account at the same time very quickly.
Many traders think that by observing time frames such as m5, m15, m30, they can increase the probability to find good trading orders. From there, they can increase the number of orders as well as increase the amount of money earned.
It is an illusion. Keeping track of low time frames means that you have orders with low winning rates and increase the risk of losing money on every poor quality order.
Review your trading strategy
If you are trading with an unreasonable strategy, then you may have a bad “tool”. It makes you unable to make a profit, or even fall into a long-term loss.
A good trading strategy, in my opinion, must be simple first. You should not rely on too many tools and indicators. Nor should you watch too much news to decide whether or not to enter an order. Too complicated, too confusing, and too much multidimensional information will make you confused and inaccurate during trading.
However, you should not immediately assume that the Forex strategy you are using is wrong and ineffective when you lose. Consider yourself first. Think of your own mistakes before blaming the strategy. Maybe it’s not it which is ineffective.
Summary
If “unfortunately” you are in a series of long losses, I hope with this article, you can look back and improve your trading results. Trading is not a battle between you and the broker, nor between you and other investors. It’s the battle between you and yourself.
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The post Use These 7 Tips When You Lose A Lot In Forex appeared first on How To Trade Blog.
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