There are lots of articles regarding the success of trading in forex, however, when it comes to losses in trading there none to be found. Since, forex is a high risk undertaking, one should bear in mind that it involves risk and losses. The “how’s” and “don’ts” after losing big in trading can be a traumatic experience which leads to quitting in the long-run.
In my opinion, the best way to deal which this is to walk away from your desk or pc, since operating under this scenario can lead only to more losses. Secondly, analyze why the loss occurred in order to learn from your mistake.
In addition, a trader should make the necessary adjustment to identify the variable which was the proximate cause of the loss. And lastly, you should monitor the changes made and keep track of how they influence your trading.
I also think it’s good for the trader to just forget what’s just happened and move on. You may be missing prime opportunities by dwindling on your losses!
Sometimes the market just doesn’t go as predicted, and as such, there isn’t really a way to justify why it happened. That’s why it’s important to manage your money very carefully and protect your capital!
I agree on this one. It’s hard, but try not being emotional about money. Keep it as a hobby, “act” professional and never risk too much.
If you make gains and trade for some time, money will become abstract, a mere number in your meta trader. It will be more like a sport in which you try to win. Losing will not be a problem, since you learn from it and get ready for the next trade.
However, I have experienced the same thing with wins. I trade with money I borrowed from my parents. This month, March, I made more with my Forex trading as a hobby, than I make with my job. Yet I don’t get fazed by it, because it’s just a number and I’ve been doing it for quite some time now.
I know everyone says it and it seems tedious, but if you [B]don’t[/B] have a winning strategy [B]or[/B] make constantly gains, you should stick to demo trading.
For me it’s more of just figuring out what went wrong and taking note of the lessons learned then moving on to the next market opportunity. Rinse and repeat!
From my own experiences of many losses and never really learning, journaling is the way I am approaching this now. I’ve always had loser accounts, but I always broke even. The problem is, I have no way of knowing what random strategy I used for that day that allowed me to regain my money. I use to think journaling was stupid because I didn’t understand the purpose or point of it really. Well that has changed.
I am back on a practice trading account with the kind of balance I would have with the spreads that will be there on a live account. When I write, I write down every single thought that went behind the decision I made. What was the first thing I saw when I decided to go LONG or SHORT? Why did I make that decision? Did I use tools? Why did I use them that way? Did I setup SL/TP? How long am I going to stay with this? Why? This kind of questioning went through my head as I wrote it all down on a $1 store notebook. I drew out graphs if anything would be vague.
I am hoping me writing it down helps me comprehend my trading and and see the bigger picture of what’s going on. So even when I have losers, I understand why.
i am reminded that: “anything worth doing, is worth writing down”. i think traders that do not journal are just not wanting to be profitable. my opinion, dont kill me for it.
I totally agree with this sentiment. There’s so much more to trading than just pushing the buy or sell button. Journaling, the prep work and the analysis of their journal is the real work of a trader.
After losing, there are certain things that should be taken into consederation, things like;
why did I run at loss?.
when did run at los?
why and how did I make this graet lost.?
How do I correct this error.
Could it be that I allowed my emotion to over ride me when executing the trade?
A trader could lose his money because he did not set his business strategy well, or traded at the wrong time, maybe he did not set the buy and sell in his favor, or did not understand the chart well enough. Proper considerations should be made in order to correct the errors involved. We should no why, when and where we made the mistakes, we should also learn from the mistakes because some traders may likely know their errors but lack the ability to accept and learn from these errors. Successful traders today once made mistakes even no matter how expert the are, they are also at the risk of making mistakes since the market varies. he difference between expert and newbies is this, Experts are not weighed down by their losses rather it is their loses that boost their energy to invest more, but reverse is the case with newbies. A trader who constantly run at loss should take more time to practice the demo account before making an attempt on opening a live account.
The best thing to do after losing is, forget about the loses involved and make a new u-turn. Take a careful look at the chart. know why and how you made the mistakes and make the necessary corrections.
take a break, spend a laugh with a family and return back review where your plan and strat gone wrong and re-plan, move-on with you’re lose and try again.
Traders should develop the understanding that when it comes to trading forex we can’t prevent loss but we can lessen how much or how large the loss would be…
After losing, the first thing to do is to know why you made the lose, know where the error is, read more about forex, take more time to practice demo account, invest little money on micro account.
i never losing trading in liteforex broker but before join in this broker I always got mc and loses many fund in forex trade. In liteforex, i’ve found good trading strategy and using EA there.
As in everything else in your life when you make a mistake you should try to get the best of it and learn from it. Losing is a part of the trading process and everyone can have some loses. Successful traders are those who are learning from their mistakes and not repeating them again.
If you are a Day Trader without a proven strategy trading on a Live Account, that is one of the biggest challenges to overcome. A trade affects your ego and your account and it is hard to just ´ move on´. The short time period that you have to trade is enough pressure on its own, so when you add in the need to take a loss, assess it, decide whether to change your strategy or not, the pressure and stress becomes unbearable. Best thing to do is to go back to demo and find a strategy.
If you are Day Trader with a strategy that has been proven to work, then you can incorporate a rule. Determine how long it takes for you to carefully assess your loss and calm your emotions (anger, doubt, frustration). After doing this and being assured that your strategy still works most of the time, then after each loss, stick to that time period rule to avoid revenge trading and get back to being more objective.
Since the opportunities are not as frequent -but are larger per trade- they naturally provide you with a longer time to assess your losses. You wont feel the need to rush your assessment of your losses/strategy just for the sake of wanting to get back into the market as quickly as possible.
When I used to Day Trade, I was easily distracted by the constant flicker of prices and candlestick movements that clouded my judgement of my losses and rushed me into getting back into the market. No matter how objective I was trying to be, just the knowledge that I could be missing an opportunity to recoup my losses before the end of the day took its toll on my objectivity and my account. On the Daily and 4H Charts, however, the stability of their trends and signals makes it a lot easier to move on.
