By Rob Colville on December 7, 2017 in
Losing streaks are never fun. But they do happen – it’s what trading is about, all the ups and downs. All the winning and… not winning. That’s a fact. What’s not a fact is that you can’t stop losing money when trading. You can. Or rather, you can stop losing so much of it (you’ll always lose some). And here’s how.
If you want to stop losing money when trading, you need to control your mind. Not in a sci-fi kind of weird way, but in a sensible, calm kind of way. Being able to think clearly before you put any kind of money on any kind of trade will help you to stop losing money when trading. You won’t be tempted to throw money away on a bad trade just because you were on a ‘winning streak’ or because someone happened to mention that it might be a good thing to do. Keep calm and carry on has never been such useful advice.
Does it sound overly obvious to say that if you want to stop losing money when trading you need to understand how to trade? Yes? Good – you probably already know what you’re doing. No? Okay – you’ve still got something to learn (but don’t worry, once you’ve mastered it, you’ve mastered everything Forex). The key is to have a good chart that works well for you and that you can follow. One of the first things you will need to understand is that trading is nothing something that you can allow your emotions to be involved with. And the way to stop emotions being involved is to stop losing money when trading! Well, that’s one of the ways. The other ways are not to risk too much money to start with, and not to overtrade. Overtrading is the same as gambling, and it will soon become something you just can’t control – which is never a good thing when it comes to Forex trading.
If you really want to stop losing money when trading, you need to take one trading strategy at a time and implement it slowly. If you grab everything you learn and try to use it all at once, you’ll lose a lot of money. You’ll get confused and your trading will too. Master one strategy at a time so you don’t overload your brain, and you’ll have a much clearer understanding of what you’re doing and why. Not understanding your own trading strategy is a sure way to lose a lot of money. If you trade like this, it’s all a game of chance, and guess what? A game of change – gambling, in other words – is a game in which you will lose.
Sometimes there will be days – even weeks – when you won’t trade at all, and that’s a good thing. If you want to stop losing money when trading, not trading all the time is one of the best ways to do that. But that takes a lot of patience. Traders – especially those who are new to it, but all traders can be guilty of this – get nervous when they’re not trading. As though they might be missing out on something. As though someone else is getting all the good trades. The thing with trading is, if you do happen to miss out on something, there will always be something else. And if someone else does well on a trade, great. There’s enough for everyone.