Forex Forums |

Go Back   Forex Lasers Forum > FOREX TRAINING > Forex Articles

Accepting Losses and Learning to Trade Forex Systematically

Forex Articles

LinkBack Thread Tools Search this Thread
Old 27-12-2017, 18:07
Join Date: Mar 2014
Posts: 979
Default Accepting Losses and Learning to Trade Forex Systematically

Even the best forex traders in the world have losing trades - losing is a part of trading - but how do you react when you lose? How do you feel? If you're angry or sad; chances are you were risking too much, or taking a trade you knew you shouldn't - or both.

Whether looking at a successful breakout trader, trend follower or scalper; there is always a common theme: they all have a trading system and they stick to it. These traders don't get emotional when they take a loss; they were trading according to their rules and the trade didn't work out. They lost a pre-determined amount they were comfortable with and accept it as an unavoidable part of trading. They move on to the next trade, knowing their system is profitable over the long term.

An inexperienced forex trader might open a long position in an uptrend thinking the market is continuing to move up. They didn't put a stop loss on the trade, as they were confident about the overall direction and worried about getting needlessly stopped out. They think "I'll exit if it moves against me" Ö Bearish news breaks and the market quickly move 100 pips against them. They are now looking at a 100 pip loss when it could have been limited to a fraction of that.

Now what? The market snaps back 50 pips. The inexperienced trader is relieved "maybe it's going back up?!". BAM! classic 50% retrace before continuation: the market falls another 100 pips. This is too much for our trader; he finally cuts the trade at the lows, losing 150 pips. Over the next few sessions the pair recovers to his original entry and beyond, in line with the trend. Did they do the right thing, cutting at -150? Maybe - it well could have continued to fall.

The fact is, our trader should have never been in this position in the first place and was forced to make a less than optimal decision. If they'd had a clear exit strategy in place, there would have been no question about what to do. Their stop loss would have been hit or they would have exited manually, (yet systematically) for a much smaller loss.

Whether your entries are discretionary or systematic, you should always have a clear exit plan for each and every trade. Don't be left saying "What do I do?"

Plan your exit and react accordingly.

Reply With Quote
Old 28-12-2017, 06:34
Level IV Lasers Member
Join Date: Apr 2016
Posts: 246
Default Re: Accepting Losses and Learning to Trade Forex Systematically

Forex is all about risk-taking. No one can provide any guarantees in Forex. There is no guaranteed way, strategy or trading plan that will always work.
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

Similar Threads
Thread Thread Starter Forum Replies Last Post
Avoid These Mistakes When Learning To Trade ForexArticles Forex Articles 0 19-02-2017 23:28
Take your Forex Losses Like a Man ForexArticles Forex Articles 0 11-12-2016 22:45
How To Survive a Run of Forex Trading Losses ForexArticles Forex Articles 1 08-06-2015 07:06
How much times need for learning Forex? shere1779 Forex Discussion 6 17-02-2015 09:23
Learning divergence and other forex strategies reynuevo Forex Systems 0 11-12-2012 04:09

All times are GMT. The time now is 09:06.

Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2021, vBulletin Solutions, Inc.