Lesson #8: Don’t Quit And Lock In Forex Trading Losses
Trading Can Be Painful
Financial markets are like herd mentality. When markets trend predictably it’s easier for forex traders to make money and forex traders rejoice. When markets become erratic it all becomes harder and our forex trading systems can become out of sync with the market for a while. We all experience this at times, as it’s the probability of our system(s) playing out.
What I’ve observed is that often traders have good times at a similar time and worse times at a similar time to others. These worse times can be when a series of losses occur that make people motivated to stop, quit or change what we’re doing.
When it comes to losing money, the motivation to put an end to it can become pretty intense if the dip in equity is significant or the losing streak becomes drawn out. This is especially true for beginner forex traders. After all, we hate to lose!
Pressures Can Intensify From All Directions
If you start to doubt how things will turn out, often there are articles in the newspaper and media that are like pouring fuel on the fire of that thought. Not only do they add fear but also they back up and support those bad feelings you’re having by giving them more validity.
Your inner circle or close family, who don’t fully understand the way markets work, can zero in like a razor beam on your equity curve and start conversations where they show doubt in what you’re doing. Keep your forex trading to yourself so that other peoples opinions don’t infect you.
When we’re thinking a certain way, our minds seem to attract external things that make what we’re thinking seem true.
Don’t let it suck you in! Your mind is seeking out support to help you rationalize putting yourself out of the pain. It’s giving an “out” validity.
Avoid Regret And Be There For Pay Day***
When the pain from forex trading gets so great you want to stop or quit, that’s exactly the time that you shouldn’t. The market is having a “shake out” and is getting rid of people to pay those few who hang tight and stick around.
You’re not the only one feeling the pain. It’s a battle to see who’s got the steel.
Many people lose at forex trading because they quit when they’re in an equity hole and don’t hang in there to trade their way out of it.
Another reason why the rich get richer is because there aren’t that many people hanging around to eat the cake. Make a firm decision to have nerves of steel, finish what you started and to be there when the market dishes out the handsome rewards.
***This lesson is subject to a forex trader:
- Having a trading system(s) with a long term edge, and
- Not self-sabotaging results with mistakes or other non-market driven actions that harm results.
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About the Author: I’m Rachel Hunter, TraderRach, a Forex Trader who helps traders achieve the life they love with forex. Be strategic and design your trading business for sustainable success and have fun! That’s my mission. Join many traders’ gaining the edge with “10 Powerful Lessons for Forex Trading Success” plus other goodies. Years of precious learning specially packaged up for you. My background before trading is as a Chartered Accountant and Chief Financial Officer. I know what it takes to make a trading business rock on. It would give me great pleasure to make a difference to your success.