How to react to a loss in forex?

I know this question has been asked and answered so many times, but with the holiday season approaching and the increase in scams, bonuses, deposits and trading activity I think you can’t stress the fact enough that losses are part of trading and that when faced with a loss it is best to walk away until emotions no longer control action. Then analyze your loss in order to learn from it.

or double up in the right direction and turn that loss into a win!

i would settle for learning from the loss and moving on, sometimes trying to make up for loses is what causes us to lose more, treat each trade like its the first. :slight_smile:

Loss is inevitable in forex, but it can be minimized. When you diligently plan your every move, you will have a greater percentage of success. Plan, analyze and be cautious. This topic is most vital to newbies who just rush into trading without knowing the basics of forex; its a shame. Newbies are more inclined toward carrying out revenge trading especially when it is a first big loss. This must be avoided. With a calm head, you can identify the loopholes and make the necessary changes.

Loss is a part of forex but its not that easy to deal with it, as you gain experience, you keep on learning from your past experience, and thats the only way to cope with it.

Loss is part of forex in which every trader should be aware but most time losing is very difficult to deal with and has lead some traders to quitting forex . And i think a solution to loss is a careful re planning of your strategy and be able to identify the reason why you lose a trade

Great point Bear…liquidity drains are the perfect environments for amateurs to get sucked into and whipsawed out of.
I say- watch the ATR and use that conservatively to set reasonable targets.

Yes…think through what has gone wrong and make necessary adjustments to move on…But one thing is to be very calm when you realized that you have lost, if you are then you can deal properly.

Since losses are inevitable, ideally a trader should get to a point where he doesn’t react to losses because it’s a part of the game. But while I’m still developing my method, I could reflect to see how it fit my entry/exit criteria and what I could have done differently. Was it rushed? Was it too risky of a set up? Was it the wrong time of day? I’d make mental notes to myself to calibrate my next trade.

After taking a major loss from the market, I leave the market for the day because I know that any trade I make after that same trade will be in a bid to recover my losses which will lead to more losses.

It comes down to perspective. Accepting a loss to someone else is nothing more than freeing up equity to me. Cant speculate without free equity.

Using position sizes that are small enough to limit a single loss to less than one percent of the total account balance helps to make losses a lot easier to take.

I have learned that walking away for a few hours is a great way to deal with a loss as TheLastBear mentioned. Risk management is very important and avoid revenge trading at all costs.

This is a sure way to blow up your account. More likely to multiply your losses.

I don’t understand how you could blow up your account by winning??!

deal mini lot first

[QUOTE=“quick pipslip;670773”] I don’t understand how you could blow up your account by winning??![/QUOTE]

It’s classed as revenge trading when you take a trade just to try & offset your loss

Plus who said that you’ll be winning? Say that you take a short trade & you’re stopped out because price goes up - there’s your loss. You revenge trade, double your position size to make up for the loss & then you go long. But as soon as you click the “buy” button, price starts to retrace, takes out your stop before going up again without you on-board. Or even just turns & plummets. That’s you down 3R, with 2R being due to ignorance.

Have a trading plan & stick to it. Plan your trade & trade your plan. If it doesn’t meet your requirements then you’re not getting in to the market, which will keep your mon£y nice & safe.

If you have the rules in your trading plan you don’t need to worry about the losses. It is a part of the game and you should know how to react by following the rules.

what are your rules when you take a loss?

Loss is a inevitable in forex but still it effects traders, and in different ways some will learn from it and start trading some will quit and some will become more cautious. It depends from trader to trader everyone has different approach towards loss.