The Importance of Acknowledging the Inevitability of Losing Trades

No one wants a losing trade. Everyone seems to get at least one though. Losing is not enjoyable, but everyone gets a taste of failure once in a while. This is why it is so important to acknowledge that some trades just won’t make you any money. In fact they will make you lose money and the longer you leave them to feed on your profits, the worse off you will become.

Greed is a difficult emotion to take hold of. Every Forex trader wants to be able to get as much profit in as possible. This is obvious. However, it is only the profitable Forex traders that understand that losses will come along every so often. The problem with greed, is that you will see a loss and let it run in the hopes of it turning green, but chances are it will just keep putting you deeper and deeper into the red.

Loss-makers should be spotted out fast and killed off as soon as they have been identified. If you spot a loser, kill it before it is too late. You want to cut it off before it eats away at your balance. If you leave it, it will feed off your profits and potentially even wipe your account.

The act of buying high and selling low, or the other way around, does feel counterproductive. It feels wrong to accept losses. When you withdraw a loss, it feels like you are cheating yourself, but you are actually doing yourself a favor. You are keeping your capital safe and it will love you for it long-term. The more you try and let your loss-makers flourish into profit-makers, the bigger your chance will be of failing in the long run. It only takes one big hit to put you out of business. Sometimes you have to ask yourself: do you want to take a small hit, or a big hit?

Of course what goes through the minds of most people, is: what if I keep taking small hits, I can’t afford that?! Well, this is a problem. You can’t keep taking small hits, but chances are once you are profitable, your profits will outweigh your losses, provided you cut your losses of as soon as possible. It is sometimes difficult to do this and it is easier said than done. You will also probably eventually find yourself cutting off loss-makers, only to find out that if you had held onto the trade it would have indeed became profitable in the end. You need to trade objectively though and ignore instances such as these.

If you are not confident with what you are doing, or you don’t think you will be able to keep up set Forex trading tactics, it might be a good idea to open a demo account if you haven’t already got one with your broker. Most Forex brokers offer demo accounts nowadays. From there, you will be able to trade as if you were trading with real capital. Then you will be able to start trying your tactics out risk-free, consistently and with real, live currency pair prices. This should help you to become accustomed with Forex trading tactics and you may well find that you make some nice profits. Just be sure you try to treat the capital as if it were real money. The whole point in practicing is to replicate the real Forex trading environment. Stay objective and don’t let your emotions take hold. Work hard at your Forex trading system and you should become a profitable Forex trader in no time.

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