How To Start Winning Again In Forex
Even with the best forex trading system ever made, there will be times when you will have drawdowns or a period when you will be making losing trades.The reasons for these are many, for example if you are trading a trending system and the market stalls, you are bound to make losing trades. If you are in a hurry to make a lot of money now, you may be in a hurry to take trades before they are set up. You may be sick, or even your broker may be hunting your stops. For this topic, it doesn’t matter what the reason for your drawdown is , you just have to start having winning forex trades again.
A few things that a forex trader needs to do are.
- Stick with your forex trading strategy - You will find yourself starting to second guess your previously working forex strategy. You will be tempted to go to all the forex forums to find that one new and better forex system and try it against your own.This is the beginning of the forex trader losing discipline and it always leads to failure and more hurt ache. Stick to your strategy and if you need to think about your strategy ,stop trading and test your new idea on a demo account or the tiny strategy testing account you have in oanda. But do not change your forex trading strategy with your real account.
- Lower Your Forex Trading Goals - Sometimes in order for the trader to regain any confidence, you might have to lower your trading goals for sometime. Imagine you are supposed to drive your car to your parents and your goal is to get there in 3 hours. However ,you get a flat tire. You will find yourself lowering your goal to get to your parents in 6 hours . You will only stress yourself if you insist on getting there in 3 hours. In the same way , lower your trading goals from say 100 pips a week to something doable like 30-40 pips a week. You will still get where you wish but it will take longer. However you will find that you are gaining more confidence with every 30 pip week instead of continuing in your losing ways.
- Do not try to regain your loses - Once a trade is lost ,forget about it. In fact once a trade is won ,forget about it too. There is no corelation between one trade and the next. You need to focus on taking one trade at a time and find a way to forget about your previous trade. Most traders go through emotional theatrics ,spending too much time thinking about things that have already past. Self absorption will only lead to self doubt and further loses. Stick to your plan and forget about those lost trades.
- Keep a diary - I can count the number of traders I know who keep a diary. Your diary should consist of your feelings and emotions and thoughts before, during and after you took the trade. Most diaries that traders keep just consist of winning trades and losing trades. Every day is a learning process and keeping a diary will amaze you when you come to learn more about how and why you trade. You may find that there is a pattern of behaviour you have every time you have a drawdown.
- Continue Studying. - Being complacent will lead you no where in forex trading. It is amazing how traders never seem to read any thing other than the new employment report numbers. Once you ask them what they mean, most have no clue. It’s like a farmer who has no idea what diseases can affect his crop. An education in forex is cheaper than losing consequtive trades. There is nothing wrong with reading even ideas that are supposed to have failed. You might just be the person who improves on them. Once you hit a bad patch , work even harder. Assume you are in a farm gardening then you hit a hard patch, you will use more force on the next stroke.
All in all having drawdowns while trading forex is part of the process and it should be embraced and not hidden away from. Once you give up , you will never be a good trader , so why give up.
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