Key Steps You Must Take To Recover From Forex Losses

October 25, 2018
Key Steps You Must Take To Recover From Forex Losses October 25, 2018 Clive Nelson

forex lossesOne of the first things that a forex trader should realize is that they will end up losing soon or later. It’s part of the forex trading business.

A trader’s aim is to maximize gains while minimizing losses but the system is such that eventually, a trader will lose. A veteran forex trader knows that he or she will experience their fair share of losses but amateur traders can get discouraged very quickly, especially if they end up losing a significant sum of cash.

Here are a few tips on how new traders can bounce back from their losses.

The Immediate Response

The first thing that a trader should remember is not to panic. Losing a big trade does not mean that they will lose everything. The key factor is to try and minimize the loss. Traders shouldn’t try to throw good money after bad to try and get out of a bad trade if it is too expensive. It is better to just absorb it.

Learn From Your Mistakes

After the loss, it’s time for a trader to understand what happened. When it comes to losses, there are two main reasons why a loss generally happens. One is an emotional loss. This happens because the trader got emotional and over-traded or was overconfident in their skills.

There is also the normal loss. This is just pure statistics. Traders cannot win all the time and this is mathematics in action. Even if a trader does things right, they may still end up losing.

Take Ownership

The next step is accepting the loss. This is where the trader assess exactly how much damage was dealt to their finances and how they should move on from the failure. It is also time to accept the loss and own it. The trader is the one who ultimately made the final decision and the loss stems from their mistakes.

Back To Basics

After accepting the responsibility for the loss, it is time to get back in the saddle. A new trader may be hesitant to risk things so it is best to start back slow. They should try using demo accounts that use fake money to train themselves back into condition. After that, they should work with smaller trades until they can start trading normally again.

Looking To The Future

Knowing what went wrong and correcting strategies is a sign of a resilient trader. For any new trader experiencing a big loss, the key is being knowledgeable and tough in the face of adversity. With the right lessons, you can emerge from your losses and become a better trader in the future.

About the Author

Clive Nelson

Clive Nelson Author

Hi, my name is Clive Nelson and welcome to Traders Bible. Just to tell you bit about myself…I have been trading FX and binary options for the best part of 10 years now. After graduating with honours in economics, I began working for an investment bank in New York as an assistant trader before working my way up. After a few years, I went on to work as a broker in London, England and then eventually came back to the U.S to work in a hedge fund, where I manage $800 million of my clients’ investments. There have been times over the course of my career where I’ve had to take a hit, but I’ve accepted that losing is part of the game, it’s a learning curve. I’ve learnt from my mistakes and you don’t have to make the same errors I did. A lot of my education came from when I was a broker and this is why I’m here to tell you that Traders’ Bible offers you the foundations of how to become a great trader.

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