By Admiral Markets
A losing streak can put a lot of emotional pressure on you.
You may even start feeling guilty every time your trade falls through.
If you feel guilty, you are either failing to make money…
…or failing to successfully build your life around your trading.
It’s always difficult to experience losses – but there is no way to trade without them.
Successful trading depends on three major factors:
- profitable trading strategy that suits your style
- money management plan
- knowledge of trading psychology.
To succeed in this business, you should take into account every important aspect of trading.
Don’t take revenge
Experiencing a loss can impair your judgement.
You may even start revenge trading after a particularly bad trade.
Emotional trading is a quick way to failure.
Treat each trade as a separate event, with its own circumstances and motives.
Don’t feel that you made a bad decision
Take responsibility for your losses.
I don’t mean you should feel guilty or punish yourself.
But every mistake is a potential learning experience.
Try to think what factors affected your results.
Did you miss some important news?
Did you misinterpret some economic event?
Or maybe there was nothing you could have done to improve the situation.
Losses are a natural part of trading
Trading is an activity that requires a certain amount of time and effort.
Losses are just another part of this activity.
You can certainly minimise the risks and limit your losses, but they will still occur.
Keep this mind, especially when you’re making big trades.
Accepting the possibility of losses will make your trading life smoother.
Fear yourself, not the market
Almost every minute of trader’s life is full of important decisions.
It’s no wonder many trader can feel fear or doubt.
But fear of losses often leads to impulsive behaviour.
Your inability to keep your emotion in check will cause:
- uncalculated risks
- revenge trading
- poor money management.
A simple loss or even a streak of losses does not make any significant impact on your trading career.
Stubbornness is an important part of being a trader.
Stick to your action plan and make sure you enjoy your trading.
Otherwise, why even start?
Keep your risks low and develop a stress-free environment where making pips is fun.
Calculated risks are professional
With calculated risks, your account will stay in the positive even if you have losing months.
Analyse your every trade and pre-plan your next move.
Treat demo as live
Practice does not make perfect.
Only perfect practice makes perfect.
I often recommend trading on a demo account before going live.
It is a good way to learn the ropes of Forex trading;
…I became a full-time trader after a year as a demo trader.
However, demo trading brings results only if you treat it as live trading.
If you believe you’re trading with real money, you can’t simply dismiss your bad trading habits.
It’s not just about you
Many external factors decide the amount of money you will make or lose:
- market conditions
- important macroeconomic events
- initial deposit
- how much time you put in your trading education
- the type of market you trade.
Your earlier wins or losses shouldn’t affect your trading decisions.
They are only yours to make.
Apart from financial independence, trading can also bring you personal satisfaction.
If you do it the right way, there will be nothing between you and your happiness.
Cheers and safe trading,
Article by Admiral Markets
Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.