FOREX — Dealing With Your Losses

[abdulla1]

One of the most important rules of Forex trading is to keep your losses as small as you possibly can. With small Forex trading losses, you can stick it out longer than those times when the market moves against you, and be well positioned for when the trend turns around. The one proven method to keeping your losses small is to set your maximum loss before you even open a Forex trading position.

 

The maximum loss is the greatest amount of capital that you are comfortable losing on any one trade. With your maximum loss set as a small percentage of your Forex trading effort, a string of losses won't stop you from trading for any particular amount of time. Unlike the 95% of Forex traders out there who lose money because they haven't begun to use wise money management rules to their Forex trading system, you will be ok with this money management rule.

 

To use as an example, If I had a Forex trading float of $1000, and I began trading with $100 a trade, it would be reasonable for me to experience three losses in a row. This would reduce my Forex trading capital to $400. It would then be decided that they're going to bet $200 on the next trade because they think they have a higher chance of winning after having lost three times already.

 

If that trader did bet $100 dollars on the next trade because they thought they were going to win, their capital could be reduced to $250 dollars. The chances of making money now are practically nil because I would need to make 150% on the next trade just to break even. If the maximum loss had been determined, and stuck to, they would not be in this position.

 

In this case, the reason for failure was because the trader risked too much money, and didn't apply good money management to the play. Remember, the goal here is to keep our losses as small as possible while also making sure that we open a large enough position to capitalize on profits and minimize losses. With your money management rules in place, in your Forex trading system, you will always be able to do this.

 

by Don Spanish

[shoaybkhan]

Depending on your experience level, trade leverage can be a powerful tool to help you maximize returns, or it can be the cause of your downfall. It is not something to be taken lightly and if you do not understand how it works, don’t trade until you do understand.

[euro]

We will all lose in forex so we have to understand that and do not be surprise when there are losses. You just need to recover when you lose and also plan well and manage loss and money so you don't lose all the time and lose little. I think lack of knowledge and experiences will also make you lose so gain more of what you lack and you should be fine. 

[Bagus]

true what you say that it may be difficult for trade to avoid losing in the trade because losing is part of the forex business and if we continue to lose should learn to correct any mistakes that make us experience this loss

We will all lose in forex so we have to understand that and do not be surprise when there are losses. You just need to recover when you lose and also plan well and manage loss and money so you don't lose all the time and lose little. I think lack of knowledge and experiences will also make you lose so gain more of what you lack and you should be fine. 

[standart]

well, loss unavoidable and every traders should accept it as part of trading. however, traders have chance to make the loss keep minimize by risking small margin in trading, always protect the trades with stop loss and choose to open positions at the good timing only. such ways help traders to minimize the loss result happen in trading.

[surya77]

losses is any one have expperience but you will think for how in next time you not repeat a same wrong on you trading activity!  you must work for how you can go profit run in here.