FIGHTING LOSSES ON FOREX: 4 WAYS TO AVOID MISTAKES
Forex trading does not happen without losses, however, there are 4 most common mistakes that can be avoided by limiting their losses.
As it was said more than once, a trader's non-compliance or a complete absence of a trading plan that includes clear rules for entering and leaving the market is almost a 100% guarantee of a failed trade in the Forex currency market in the long term. As a rule, novice traders have the same error. In case of failure, emotions take precedence over the mind, and the newcomer simply throws up his trading plan, thereby only aggravating the situation and re-applying unprofitable trading methods. Such traders enter the position with the whole deposit, ignore the stop-loss and hold unprofitable positions, in the hope of a quick turn of the market, ignoring the reverse signals or interpreting them in their favor, giving out the wishful thinking.
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| How to deal with losses on Forex |
SCIENCE RECOGNIZES ITS MISTAKES IN TRADING
In fact, such traders just can not accept the idea of a loss. Why do they continue to suffer, instead of determining the root cause and trying to eliminate it? Traders can be conditionally divided into two categories.
The first category does not see anything complicated and shameful in recognizing the error of its trading method. Having determined their mistakes, such traders make the necessary adjustments in their work and continue to trade, as a rule, is much more successful.
The second category of traders will blame everyone in the world: the head of the Central Bank, who spoke so poorly about the monetary policy , the "curvature" of analysts, the inaccuracy of indicators, the unfairness of the forex broker - anything but himself. It is very difficult for such people to be honest with themselves and to admit their mistakes, it is much easier to engage in self-deception.
If a trader ignores the difficulties that have arisen and floats downstream, watching how the money ends on the deposit, then it is necessary to drop the trade on Forex.
But if he decided to fight, then first of all you need to understand the situation, trying to find errors in their actions . To do this, you need to keep a shopping diary in which to detail not only the information on transactions, but also your personal trading observations. It is very important to recognize the patterns that lead to errors, and try to get rid of their influence? Here it will be appropriate to give some recommendations.
4 RULES OF THE FOREX TRADER, ALLOWING TO AVOID OLD MISTAKES
A trader can never succeed if he does not agree to change something in his work. How to force yourself to trade "in a new way", avoiding old mistakes and increasing the effectiveness of trading?
1) rule: eliminate stress
First, you need to completely eliminate the stressful component of trade. Stress deprives the trader of freedom of thought, flexibility and the ability to assess the situation from different points of view. How to avoid stress when trading? The answer is obvious - less to trade. The less transactions, the less the trader will experience stress . This is especially important for a beginner. For example, you can change the style of trading from intraday to medium-term. And you can just take a break in trading, relax and gain strength.
2) rule: on trading life does not end
Secondly, nobody has canceled personal life yet. The Forex market existed before us, and it will exist after us, in one form or another, and any trader, unfortunately, does not become younger with time. Certainly, trading, especially profitable - extremely fascinating occupation. But all the money still does not work. In addition to trading, there are many other classes in other areas that fill life with meaning, developing a person as a person, and not just as a forex trader. By the way, it's no wonder practice shows that this helps to approach trade in the foreign exchange market more objectively.
3) rule: the fight against the market
Thirdly, the trader must learn to perceive the market adequately. Fighting the market, going against it is a thankless task and one hundred percent unpromising. Completely accept the state of the market - the main way to deal with the uncertainty prevailing on it . The trader is not in a position to control the market and influence it. Therefore, you need to learn how to take Forex as it is, not to try to adjust it for yourself, but to adjust yourself, trading in accordance with the situation. The trader does not lead the market, but the market leads the trader.
4) rule: limitation of losses
And, fourth, do not live a life of denial. A trader can not afford to get too much loss. You need to control your losses, manage risks, appreciate what you have and enjoy it. Only in this case the trader will act freely and will have an opportunity to show a creative approach to trading.
Summing up, it is necessary to say that a successful Forex trader needs to learn how to accept his losses and mistakes, be able to find and eliminate them. You need to develop your strategy by testing it on a demo account or cent deposit, having a trading plan with clear rules for entering and exiting the market, limiting your losses and managing risks. Undoubtedly, any trader has unprofitable trades, but the ability to perceive them as the costs of the profession, while making appropriate conclusions - this is the highest level of trading.
