Why shouldn’t be scared of losing trades when using your forex trading system
This article looks at the reasons why you shouldn’t chop and change your forex trading system just because of a few losing trades.
You may have heard it so many times, or read it over and over and still ignored it, but you really have to believe it. Trading and losing are simply inseparable. You can’t do anything about it. In fact if you do not know how to lose money in the right way, you may never be a consistent trader. There are a few reasons why people quickly dump their forex system after a few losses and some of them are:
- They traders have simply refused to come to terms with the fact that a trader can lose 60 out of 100 trades and still end up profitable.
- They simply hate seeing negatives in their trading journal or account history.
- The positions they took were not in line with their money management rules and this caused an increase in their stress levels and lead to huge emotional swings.
For the rest of the article, we will look at how you can deal with this problem and make yourself a trader that believes whole heartedly in his trading system.
Channel the ‘fear’ emotion to something positive instead of changing your forex trading system
In many areas of life, the fear of losing money is a positive emotion to have. If this emotion wasn’t present you may not be here trading forex as the economy and markets would be in chaos. We are all protective of our finances because we went through a lot to earn what we have. In trading however, this natural emotion to be on the defensive once our money is on the line has to be channelled into a different state of mental awareness.
So instead of being fearful about losing your funds during trading, be happy that in line with your forex trading system, you are fully in control of how much you stand to lose on each trade. If your forex system is any good, you should have stop losses, position size etc. properly sorted out. So once you get into a trade and the fear creeps in, remind yourself that you are in control and tell yourself “the worst that could happen is that I lose 5% of my account” or something along those lines.
A test to determine if you still have the fear of losing
Here is simple test if you simply cannot stop thinking about the trades you have on. If you are glued to your computer screen for far too long, instead of being in bed or watching something on TV (my two main activities maybe not yours), you are scared of losing. This means you are either scared of your stop loss level getting hit or you do not have confidence in the position you just took. If you are also in the habit of modifying and looking all over the web for a new forex trading system after every losing trade, you are trading with fear.
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