If you are a rookie in the trading world, you might be surprised to hear this, but losing money on your investments is a big part of any successful trader career. In fact, forex trading is just as much about losing as it is about winning, and although I don’t really have any statistical evidence of what I’m about to state, I’m certain that if you look at most successful trader’s investments over a whole year, there would be just as many losing investments as there would be winning. The key to trading with currencies is minimizing your losses and simultaneously maximize your profits. Read more about this on forextrading.pm, which is a trading portal that has recently become very popular.
So, in every experienced traders career, there has been at least one period of time where he has had a losing streak. There’s nothing we can do about that, as there’s no way that we can predict the way the market will change with a hundred percent accuracy, and we just have to accept that fact that every once in a while we’ll just get… unlucky.
But what can we do when we experience such a thing? Surely we must be doing something wrong. Well, although even the best of traders sometimes lose money, there are certain things that some people do that should be avoided. First of all, you should never overtrade. This means that you shouldn’t just throw your money into any currency just because your buddy tipped you off, as it would be gambling with your money. Instead, make sure to do your research carefully. The more you read up on something, the more certain you will be about whether an investment will be appropriate or not. Sure, it means a lot more work, but just like with everything else, it’s the people that work the hardest that get the greatest rewards.
Secondly, I strongly recommend that you keep a trading journal, so that you can easily track your history. This way, when you feel that you’re going to hit that horrible bad streak again, you can go over your trading history and look for any common threads that occurs when your losing. There is a Spanish website called cambiodivisas.eu that has some good tips on how to easily keep a trading journal, so feel free to check it out (if you speak Spanish, that is!).
When you are losing, the most important thing to remember is to resist the urge of wanting to win back you losses quickly. This is so common, but it’s such a classic mistake. The last thing you want to do when you’re trading is to take massive risks, and investing in a high risk trade will always make you more likely to lose money in the long run. Instead, when you’re losing, make you investments even slower, and as you manage to turn it around, the slowly increase you investments again. This is a much safer way of doing things. It will take a little bit longer, but it’s definitely going to be worth the time.