How to Manage Losing Trades explained by professional Forex trading experts the “How to Manage Losing Trades” FX trading team.
How to Manage Losing Trades?
If there is one feeling that traders universally abhor, it would probably be the emotion derived from watching a losing trade turn deeper, and deeper against them.
At this specific point in time – you are watching yourself getting poorer; the complete antithesis of why you trade.
If the trade is left unchecked, things can get really ugly very fast. An overleveraged position can lead to an outsized loss; and as a position can move against you for an extended amount of time, these losses can irreparably damage futures. Prevention is the Best Medicine
By prevention, we don’t mean preventing taking trading losses altogether. That would be impossible. Rather, we refer to the fact that traders should do their best to prevent unmanageable trading situations and placing themselves in these precariously unfavorable scenarios.
This is like a trader taking an overleveraged position, without a stop on the position – and after the trade moves against them they have to watch and decide how to react after they’ve already lost money; and are staring at the prospect of losing much more.
We saw the effects of this phenomenon in the DailyFX Traits of Successful Traders series. The Number One Mistake that Forex Traders Make is the fact that they take such large losses and such small wins. The chart below will show the average gain v/s the average loss on some of the most popular currency pairs, as taken from The Number One Mistake that Forex Traders Make:
How to Manage Losing Trades Conclusion
For more information about currency trading brokers visit TopForexBrokers.com Forex brokers comparison website, Tip ForexSQ.com foreign exchange trading
experts please by share this article about How to Manage Losing Trades