Accepting Profit Drawdowns & Losing Trades

[ForexNewsMarket]

Forex Trading - Accepting Profit Drawdowns and Losing Trades

Whether a trader has years of experience, is using the "holy grail" trading system or is the luckiest person on the face of the earth, there's one aspect of the Forex market that simply can not be avoided, losing trades. Losing trades occur when the market moves so far against you that you either need to close your position of your stop loss rate closes it for you for damage control purposes.

So we know losing trades are inevitably going to occur, the important thing is that you deal with them correctly. After losing money on a trade, don't get flustered or worried, just brush it off and begin to analyze what happened. Depending on your situation, following this step and choosing an option will help set you back on the right track.
First, determine what happened and what went wrong.

Was your market analysis correct? Did you follow the trend using a method that has worked for you in the past? Did you follow trading signals provided by a system your using or did you ignore them? Were you using a trading strategy that you're comfortable with?

Option 1: Stick with your current strategy
If the trading strategy, system or analysis you were using has worked for you in the past, you will probably want to continue to do the same thing you've always done. As we said earlier, losing trades do occur even with the best strategies or if your strategy is tested & proven, brush off the loss and, when you're ready, place your next order.

Option 2: It's time for a change
While a losing trade can be a fluke, it can also be a sign that the strategy you're using isn't effective and could actually cause you to lose more money in the long run. Review the method you've been using and, if you believe it's time for a change, take action. Have a look at trading systems & automatic signal services that are proven to work, test new strategies with a demo account or small deposit and, most importantly, make sure your new strategy is effective before using it in the open market with a real account.

Losing trades can be a setback for any trader, handling them the right way can mean more money trading and, in the long run, can put you farther ahead in Forex than you could ever imagine.

[DickP]

Very good advice

[WalterWhite]

There is no holy grail, but this is still sound advice.

[tab]

Thanks for the info mate

[pipsmart]

I certainly believe that there is no fool fool proof strategy at FOREX as the market is very volatile. You just have to learn how to adjust based on your monitoring.

Also, you can't be a professional trader if didn't lose any trade. That is a no-no, you will always lose a trade. Its just how you handle the lost that will make you a successful trader. Learn from your loses.

[Mike]

Forex News Market, you have provided some very useful information here, I will be donating 1000 points to you. Thanks, keep it up

[Jones]

Good article, thanks. I believe if a trader can not accept the occassional loss that comes with all strategies, then he can not be an effective trader and will most likely fail in trading. It is a tough profession for those who have an attachment to their money.

[FXTechTrader]

I agree 100%. Accepting losses is essential. If you keep throwing down bets at blackjack and keep losing, whats the difference? Why is it easier in a Casino for people to accept losses then in Forex trade one loss and people are discouraged?

[voodooman]

Very good advice

[AFF]

Oh my gosh, it took me so long to stop worrying about every little loss, even today it kind of bothers me to lose, but I don't let it mess with me when making future analysis on trades

[★FX★]

Lack of planning is what the rest of those parts of the pattern flow from. You need to have a good game plan and practice it with demo funds until you are consistently profitable, then and only then should you deposit actualy money to trade with. Some people even say a minimum of $30,000 is necessary to be profitable, I don't agree, you can get away with depositing a few thousand, but you need to be very strict in your trading style to not incur huge losses that could destroy your account.

[DarkManFX]

i still have problems accepting that I might have to lose some to win some, dunno why i can't get my mind around it

[Death420]

The unsuccessful trader will respond with frustration: “Why do I always get caught buying the highs? I can’t believe “they” ran the market against me! This market is impossible to trade.” Because of that frustration-and the associated self-focus-the unsuccessful trader does not take any information away from that trade.