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Forex Traders Lose Money is an inevitable part of the forex trading process, but many traders struggle to accept losses calmly and objectively.
FX trading is a challenging activity that requires a great deal of stamina, endurance and patience. To become successful over a long period of time you need to learn how to trade with little emotion. You also need to learn to accept losses, and to accept that losses are an inevitable part of online forex trading.
Responding To Losses
It is very difficult to accept forex trading losses with ease. A loss means that your hard-earned money is gone from your forex trading account for good, which can have a huge impact on a trader emotionally, mentally and even physically.
The desire to win and the human tendency towards loss aversion is often too strong for the ego. A trader’s nerves kick in, they become stressed and tense, their shoulders arch and they begin to sweat. For this reason it is essential to reduce losses as much as possible by following a forex trading strategy and trading plan.
Nevertheless, once you have incurred a loss from forex trading your goal is to remain calm, focused and disciplined. You need to accept that loss with grace and move on to your next trade.
For many traders, stepping out of a trade when they should becomes difficult due to feelings of anger or anxiety. Such traders are unable to manage their emotional state in the heat of a loss. The trick is to keep your trading brain switched off and your emotional brain switched off.
How to Stay Composed and disciplined in the Heat of a Loss
The easiest way to respond to a loss is to take deep breaths. This reduces the impact of stress and calms your heart rate. When stress kicks in your breath naturally becomes more shallow and fast, so taking deep, slow breaths that are controlled helps to reverse the impact of stress and keep you more composed. This in turns helps you to remain more disciplined.
It is also important to take into account what’s going on inside your head at that moment. Try to take a step back and keep track of the thoughts you are having as the loss occurs. Instead of thinking: ‘I always lose; the market always goes against me’ ask yourself ‘what would an accomplished trader be thinking right now? How can I respond to this loss more objectively?’
Your ultimate goal is to deal with losses when they arise, focus your attention on the positive aspects and move on as quickly as possible. This will help you to become a successful, accomplished, long-term trader.
