How do you cope mentally with ups and downs

Generally, when I think now is a good time to close a trade I close the trade. I’d rather have less money but really have them rather than wait for more and lose all I’ve earned up to that moment. And if I close the trade and the price continues moving in my favour? Well, the market never stops, there will always be another opportunity to trade.

Bella, you are on to something!
These two articles might be helpful dealing with exits:
Should I Stay or Should I Go? - ReThink Group
Nailing Better Trade Exits - ReThink Group

I use set and forget strategy, in which you place a trade and then forget about it. You can do this by using good money management. If you will have a high risk trade on line, then you will surely face psychological pressure.

It comes to you with experience. More you understand the specific of trading and learn about causes and consequences, more you think of losses as of lessons. It becomes an usual thing. The main secret is to more profit as a result.

I think you need to stay calm and trade with small amounts and then you could cope up with loses and then you may be ready to face more loss if you earn any.

How much time did it take you to learn how to keep calm with big losses?
I’m a newbie trader and even small losses make me upset sometimes (of course, I spend much time thinking my strategy to details, watch markets all the time and the result is loss, who would be happy)…
How much money better to have on deposit at the beginning? Is $100 a normal depo for a novice or I’d better try less or more?

Position-sizing ([I]and learning how to work it out[/I]) is much more important to the process than the amounts of money [I]per se[/I].

In my opinion, whatever the size of your account, you’d be well advised never to expost more than 1% of your account-balance to risk in any individual trade (at least for the first year or so).

Have you already practised on a demo account, Mohdfx11, and been steadily profitable for a period of time, before trying trading with real money?

I have to understand the reality of forex. Hers ups and downs are daily routine. We do trading for profit taking but it is not necessary all out trading will be profitable. We nave to accept loss too . If every one is winner then how market will run. At the same time some one is profit and other one is in loss. It is app about market ups and downs where we not cope well.

Hello Bellamy,

Personally I would say it all depends on my:

Mindset and
Position size.

For instance, If I was risking 2% of my account for a little more than 2% as returns, I normally would not bother baby sitting such trades because most times I do hold trades for days before I take profit and even if I lose the trade, it doesn’t really hurt because I know this game is all about consistency in your wins at the end of the day.

On the other hand, if I am risking 5% of my account to get something bigger in a volatile pair, I would baby the trade and when I sense that the pair is going to make any form of retracement which I may have no control over, I take profits at that instance…Most times it still ends up going my way but hey, the fact that I risked a lot on that trade, gives me that satisfaction that I still earned good bread that’s worth more than 3 regular trades hitting target profit.

You just have to know when to trade safe when the odds are against you and when to be very aggressive when your muse is smiling down at you.

Hope this helps, I wish you all the best

Pipsharingan quite clearly has the holy grail here - info that we would all love to know.

I have one question though, if you don’t perhaps mind?

If you already know that the odds are against you prior to entering a trade, as you have stated in the above quote; why enter in the first place? This sounds like a diminishing returns approach?

Good Question,

I don’t know for how long you have been trading, but I do know that there are good days/weeks and bad day/weeks for every trader no matter how profitable you may be. If you do keep a journal and look back in time, it will give you a clue to when and how to maximize your trades and when to just play safe. Let me explain further by giving an example.

Say my first week of March, I took 2 trades and they were positive (irrespective of whether they hit my target profit or not), my second week in March I will be more assertive while trading as regarding my R/R ratio because my confidence has been boosted by my previous performance, most times this technique gives you that BIG BREAK you have been waiting for.

On the other hand I may start the first week of March with two losses, if so my second week will be plagued by me being more conservative as regarding R/R ratio in my trading. This is a common behavior among some traders, you have to truly master yourself and know when you are at peak productivity and when you are just staying afloat, if a trader has not established this yet in his career, then trading becomes a merry-go-round affair where profits made today is giving back to the market.

I hope this helps

I totally agree that there are good days and bad days - that’s all part of trading, isn’t it!

I read your reply in the wrong context according to your most previous answer. I incorrectly assumed that what you meant was that you knew that a particular trade ‘set-up’ was always a low probability trade [in the context of expected positive returns], regardless of when it is placed into the market. Naturally, this made me ask the question “why would one even entertain the trade in the first instance”.

What you’re saying is that you adapt your risk in monetary terms as a direct action of your running success rate, which really translates to compounding up after successful trades and compounding down after unsuccessful trades (according to what you have said, perhaps?)

Personally, I don’t adjust % of risk taken on any trade, irrespective of my in-month run rate, all be it either an incredibly good month to date or a terrible month to date. What I do actually do though is compound at each month end while keeping the % risk per trade constant. Regardless of emotions - I aim to keep everything consistent :slight_smile:

And to answer your first comment; I’ve been entertaining the markets since the back end of 2008.

I have to understand the reality of forex. Hers ups and downs are daily routine. We do trading for profit taking but it is not necessary all out trading will be profitable. We nave to accept loss too . If every one is winner then how market will run. At the same time some one is profit and other one is in loss. It is app about market ups and downs where we not cope well.

Finally Jezzode,

we are on the same page, that’s the beauty of forex, there are so many ways to trade the market, some traders are the conservative type, others are risk takers while some traders fall in between. The whole idea is to master which suits you along your forex trading career.

I didn’t realise we were waiting for something…

in my opinion.

knowing when to get out/stay in a trade is an important part that you just need to practice over and over.

When i am in a trade, i actively remind myself to not get emotional and make wrong decisions. if i exit the trade down and it goes in my favor then nevermind. After a while of doing this, you will just know when the decision your making is an emotional one and to relax and look again.

If you are a confident that you entered the correct trade, then it is important to not let emotion dictate what you do once the trade is on.

Remember just because your system said price was going to do one thing, does not mean price is obliged to do it.

This is a fairly important comment; and one that traders clearly change their mind upon when attempting the learning curve.

I believe this above statement changes up to three times when making the transition from complete newbie to novice and then finally to professional - at least when [I]considering the mindset[/I] which is used when trading.

  1. [B][U]Newbie[/U][/B]: Attempting to predict where future price levels will be according to historical behavior. The average newbie also understands that it’s not possible to be correct all the time.

  2. [B][U]Novice[/U][/B]: Stops trying to predict and understands that price is [mostly] random, and that taking the approach whereby you try to predict future price levels is incorrect. Instead, the average novice trader starts to understand that trading is based on probabilities of being profitable; regardless of the market direction - the penny drops and they finally stop trying to predict and actually accept.

  3. [B][U]Professional[/U][/B]: Geared towards positive expectancy, totally understating and accepting that trading is all about probabilities. A professional trader will have statistics backing up each and every decision that they make within the market; this allows them to accept losses as they know over the long term they will still be profitable.

A fairly big difference from from tier 1 to tier 3 - however a benchmark that I find reliable when attempting to understand how much a trader ‘really’ knows…

Agreed. Very good breakdown.

You are right every one should think like that , Market not give you profit all the time. You have to loose if you do mistakes or do not follow marker. After loss I will try to do next trading with much care where my loss will be less if I am not in profit. I have to minimize my loss to improve my trading.

you are thinking and emotionally reacting like a employee of a company. you go to work and have a task to complete. the company has all the safe guards and procedures in place to ensure you successfully complete your task, and should you not succeed or need help the company provides it.

As a trader you have to create those procedures " trading style/system" and safe guards “money management”. And after it has been tested with time and you believe it to be successful. then you will find it emotionally easier