Losses are painful. Humans don’t like to lose. Traders don’t like to lose even more. Unfortunately, losing takes a huge part in Forex trading. You cannot escape from it. So, the sooner you accept it, the better.
Can you avoid losses using an accurate and well-thought trading strategy? No matter how accurate your trading strategy, you can never escape from losses. What you have to do is to accept it. Embrace the fact that losses and trading Forex always come in pairs. So, you don’t have to worry about those small losses. What you need to know is how you should respond when consecutive losses strike you.
Stop trading and stay away for about 24 hours
Losing trades should be treated as holes. If you fall into a small hole, you can easily climb out of it, relax, and control your movements. But if you try to dig, the hole will become a lot bigger and it will be so hard for you to come out. Just like trading, if you experience a string of losses, take a break and calm down.
Check the loopholes of your trading strategy and you as the trader
There will be a time in which a good trade will fail and the bad ones unexpectedly succeed. Maybe the trading strategy has a problem.
Stick to the rules of your strategy
Every trading strategy is made out of specific market conditions. Some work on consolidations while others are a perfect fit for trending markets. Once you have a specific trading plan, don’t forget to stick to its rules.
Develop a good mindset
Without a doubt, the Forex market is a tough place to be. There are all sorts of competitions going around and you need to be tough to succeed. Always remember that since others can succeed, why not you? Set a goal and keep moving towards success.
When you encounter bad trades and you lose, do not get easily discouraged. This is normal in the early days of trading. Also, when a problem approaches and you lose, do not take a long break or run away from it. The best thing you should do is to have a deep examination of the problem and resolve it as soon as possible.
Reduce the exposure and the lot size
Since you already took a break and concocted a better strategy, now is the time to rebuild your confidence and you can only do it if you reduce the lot size.
Find a mentor or a trading community that will shower you with great ideas
There are a lot of forums online and words and professional traders that you can ponder on. There is no limit to learning. Do not let yourself enter a lone wolf state. Talk to other trades, gain their opinions, and reflect on your mistakes.
Go back to trading
Now that you’ve followed the steps mentioned above and identified the problems that caused your downfall, it is time to go back to the market and slowly trade according to your Forex trading strategy.