Why You Need to Learn to Lose Properly to Win at Forex Trading

by John Arnold
(United kingdom)

Who wants to know about losing, no one! But unfortunately losing is as important as making a profit in the forex trading industry. Losing money helps you gain the required experience; hence it is important to lose properly in order to gain in the forex trading market.

We instinctively try to avoid losses, it is part of being human and we take various routes to avoid it. The first step is to accept that there will be losses, you can only control the amount and not stop it completely. Just like any business, there will be some cost that needs to be invested, view the loss you make as the cost of doing business. This change of view will help in taking the losses earned in the right spirit, the simple fact of forex trading is that you will make losses and dealing with losses is an essential part of your development as a forex trader.

Most traders feel frustrated and pain on making losses and that is natural, but the point to remember is that, you do have control on how much you are losing and when. Thus if you eliminate surprises, which is possible by understanding the market using forex technical analysis and by predicting the market with forex news, it is possible to manage losses.

Never expect to win, any trade can lead you to losses, you can never be sure that if you had taken certain other steps where it would lead you to, it could be profits or losses. There is no certainty in each step, it basically is judgement calls based on analysis and experience. The one main consideration during forex trading is that you should never invest more than you can handle either financially or emotionally.

Since the forex industry provides all necessary information in the form of forex technical analysis and forex news, the outcome of the trade is basically your own single decision and cannot be blamed on others. Thus every step taken should be carefully done. This should be your mindset to trade.

Once you have decided to trade, and your mind is calm and decisive, the next step would be to know your losses, understand the amount that you can afford to lose. Based on this amount, you do your research, understand the forex technical analysis provided, keep in touch with the existent market scenario, the highs and lows predicted, the economic stability, follow the forex news and then decide on the position size.
You now have taken the most important decision. It’s time to take a step back and forget about the trade. The main decision and steps are complete, now it’s just the result.

To summarize forex trading is like any other business, the basic component is how you look at it, the investment made, the experience gained, the preparation done, the risks understood and finally the actual step. Thus, it is very important to understand your losses and then win the trade.

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