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Forex Trading Tidbits

When it comes to trading, having the appropriate mentality is just as crucial as having the right information. Let’s speak about losing streaks and how to deal with them.

The market might become difficult to forecast at times, and you may find yourself in a situation where none of your transactions are lucrative. It’s especially important when you’re just starting out in trading. Losing on a regular basis may lead to sadness, and as a consequence, you may want to stop trading. However, there are lessons to be learned from every loss you encounter when trading.

Never allow a few failed deals to deter you from becoming a trader. We’d all like to see a profit in our bank accounts. You can live with 1-2 poor trades, but losing 5 or 6 in a row might destabilize your trading for a long period. This is the point at which many traders lose their cool. They either stop trading for good or strive very hard to win back. Both result in massive losses.

Trading

So, how does one deal with failure after failure?

To begin with, if you realize that you are losing and are disappointed or furious about it, it is time to shut charts and not start new trades. To calm down, step away from trade as far as possible, both physically and metaphorically. When your mind is clear, it’s time to analyze. Here are some suggestions on what you should concentrate on:

  1. Examine your risk-reward ratio. Perhaps you lose because you take on too much risk, going all-in in the hopes of making a large reward.
  2. Examine your approach to see what went wrong in those transactions and what needs to be modified.
  3.  Consider trading on a demo account for a while. It may help you regain confidence and make decisions with a clear brain that is not distracted by emotions. 
  4. Continue to educate yourself. Perhaps it’s time to enroll in a course or study a new book to hone your core analyzing skills.
  5. Discipline yourself and be patient.

To summarise, I’d say you need to pause and take a step back in order to take two steps forward in the future.

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