InfoTrades

Losing really sucks doesn’t it?

From birth, we are trained to win. Win Win Win….. Never lose lose lose!!!

It is therefore not surprising that when you start forex trading you may well be one of the people who find accepting the loss – really, really difficult !

However, when we start forex trading we have to learn to accept the loss, take it on the chin and move one to the next trade. This is all in the knowledge that forex trading is a matter of winning and losing and we have to neither be elated when we win nor devastated when we lose because if we are using a successful forex trading system, and observing money management rules then we shall be successful as long as we stick to the rules and follow the system!

Easier said than done I know!!

Loser, loser, loser! The platform shouts at you in a voice so loud to you, yet no one else can hear it. I am not having that, you reply in your head, I’ll show them…..and before you know what you are doing you have moved your stop loss position to give yourself a potentially even bigger loss – or here’s another one, you have added to the losing trade by entering another lot.

Alternatively, you have entered the trade the in the other direction with a double lot somehow trying to immediately recoup any potential losses…….all traps that at sometime every new trader has fallen into!

The question is, are these personality traits that one can learn to overcome or are they part of ones psyche and we are stuck with it?

Can we re-train certain gut instincts and learn to control our knee jerk responses to losing?

Will we ever be safe, solid, reliable traders if we do not ? When famous banks have been brought down by so called rogue traders, were they always rogue traders who could not accept a loss but it just got out of hand or had they accumulated losses due to their particular forex system which were now too big to handle. Stops must have been moved!!

Of course trading a demo account is to be recommended until one is conversant with any form of forex trading, so that one is not risking any real money, only virtual cash. However, if you consistently make profits for a while and then lose the lot, I would say that there is something wrong with your ability to accept the loss (or your systems’ ability to accept the loss).

There are a multitude of forex robots out there, with many claiming to have very enviable win to loss ratios. However, some of the robot system manufacturers put in such wide stops that one would have to have very deep pockets indeed to withstand the potential drawdown and most “lighter weight” traders would have disappeared in a margin call long before the stop would have been hit. So make sure that you are using a system with affordable stop loss positions!

So how do we learn to accept the loss as part of our every day life and not respond to it in a dangerous way!

Well suppose we think for a moment about your favourite football or soccer team. Do they win every match? Most probably they do not. However when they do lose a match, they will analyze that match and look at where they may have gone wrong and where they could make improvements for the future. Then they move on and prepare for the next game.

The league winning football teams will have a few losing games. They are usually winners, but they will still have to come back after their losing games and be in the right frame of mind to play again to win.

In the same way professional tennis stars or golfers will never win every championship that they enter, but they are still high ranking winning professional sportsmen and women. Overall, they are not losers, even though they lost some games. They train themselves to enter each new game with a clear head and a winning attitude based upon clear appraisal of anywhere that they may have gone wrong in a previous game.

Of course we are conditioned not to like it when things do not go our way. I hate it if I cook a meal and there is a criticism of any small part of it, but with forex trading, winning and losing have to be met with one and the same emotional response, and when we do lose, we must see it as an opportunity to re-appraise our trading and ensure that we are doing everything correctly.