Losses are a part of Forex trading, in fact all trading, so it is best if traders have a strategy in place to deal with them. Not only that but you can use them to your advantage too and learn from them to improve your future trades.
If you are still not quite there and losses sting, this blog might help. In it I am discussing ways to cope with loss and what you can take away from them to use constructively in your future trades. Take a look.
Record all losses
Keep your friends close and enemies closer. You should record all your trades ideally because wins will tell you what to do more of and losses show you what doesn’t work and what to avoid.
It is possible that once you start putting your trades down in a journal you will be able to see patterns in your wins and losses. Being able to find and identify those consistencies is the best thing that can happen to a trader and recording is the first step in getting there.
Dissect a loss
Once you have your losses laid out in front of you, it’s time to analyze and dissect them. Like I mentioned in the previous point, you need to see if there is something that stands out. If there isn’t, look deeper.
Especially if you have just started out and most of your trades are turning into losses then you are definitely in for a deep dive.
Common problems that you need to consider that you might unknowingly through as well include going against the market, not using price action to your advantage, entering trades randomly without trying to find the right market conditions, and FOMO trading without testing the market.
Recognize emotional weaknesses
Identifying your emotional triggers and how your anxiety about a trade surfaces is also a key step that will help you identify what you need to change in order to be guard your trades in the future.
I have talked exhaustively about psychological aspects of trading and emotional management before in other blogs so you can take a look at those. Bad psychological patterns and unhealthy coping mechanisms against loss or the fear of it are very common causes for failure as a trader.
When we all know it is part and parcel of Forex trading then there is no point beating yourself up about it every time. The sooner you are able to move on from it, the less it will demand from you emotionally.
Even the best of traders don’t always win so if you are just starting out, don’t expect to never lose.