How to Minimize Forex Trading Losses
by Forex currency Day Trader Gregor Anton – http://www.ForexCurrencyDayTrader.com
Last week I had some good trades and some bad. You will have losses. How you manage your money and minimize risk, and minimize losses will play a key role in becoming a successful Forex Trader.
Rather than looking at how to get the most pips and make more good trades, lets focus on minimizing your Trading Losses:
* No Trade is a Good Trade – Patience is key. If the market doesn’t make sense, stay out. Create a demo account and practice first. Only trade when you’re 100% sure all your trading conditions are met.
* Don’t Babysit Your Trade – Everyone loves watching that green positive number get bigger and bigger, but don’t stress yourself out and watch it fluctuate or worse, go into negative red numbers. Follow your Forex trading plan, set your stop losses and take profits. Walk away or do something else. Don’t stress over your trades. Let your system handle it.
* Don’t Get Greedy – No matter how many pips and profit you make, you’ll always want to make more. Sometimes less is more and that extra 10 pips can cost you the 200 you just made earlier. Emotional and impulse Trading is Gambling.
* Save Your Emotions – This is a tough one for me, it’s hard not to get frustrated when you’ve had a great week and in the matter of minutes you can see your profits disappear. Even with the best of trading plans, systems, and strategies. And in my experience, especially with Forex Robots, Signals, and Alerts. Let your profits run, cut your losses, and be sure to stick to your system and strategy.
* Measure Profit in Pips – I find focusing on pips rather than profit in dollars keeps you focused on your trading goals. The right money management and risk reward ratio is key too and surprise surprise will usually align nicely with your comfort zone.
* The Trend is Your Fairweather Friend – It will change and according to some, the Forex Market is Trending only 20% of the time. Don’t get me wrong, identifying the trend or lack of a trend, is important, you want to do so across multiple time frames. But don’t rely just on the trend, use indicators, trendlines, and pivot points.
* Set Goals – Know exactly how many pips you are targeting. How many good trades you’re going to stop at. How many bad trades you’re going to take before walking away. Everyone has bad days and what I do is go for a walk, eat some Ritter Sport chocolate, grab a Mocha at Waves Coffee, or change my scenery in some way that gets me away from Forex. Bottom line, have a plan, follow it, make sure it’s a Smart Plan. Specific, Measurable, Attainable, Realistic, and Timelined.
* Set Conditions – When are you going to enter a trade? Exit a Trade? When do you take profit or take a loss? What hours, sessions, and currency pairs are you trading?
* Economic Calendar – The Forex Market tends to become volatile around important economic news. This “noise” can really throw off your trades. Or it can help your trading. Either way, you need to stay on top of Forex News by checking the Economic Calendar at least daily.
* Manage Your Money – Only Risk 5% at most. Combined. If you have multiple trades, the sum should be 5% or less. Any more and you’re asking for a heap of trouble and the word gambling comes to mind. Be very careful. The more you risk, the sooner you can go broke and the longer it takes you to rebuild your account.
* Know Your Risk / Reward – How many pips are you willing to risk to make your pips? You want to risk less than you are bound to make. I like to risk no more than I’m bound to make, better yet, I like to see twice as many pips as I’ve risked.
* Practice Practice Practice – Open a demo account, thoroughly test your system, plan, and strategy. Your demo account balance after 1 month of trading will give you a good indicator of how well you’ve done.
* Take a Forex Trading Course – Education is key. Education can be expensive, the alternative is far more costly. That one tip or strategy you learn can be the distinction that’ll change everything. There are many great trading courses out there, and there are many scams and hack-job courses too. Visit my site to find out who I swear by.
* Walking Away is the most important part of your day – A great trading day, week, or hour. x amount of successful trades and you decide to stay just a little longer, go for that extra pip and before you know it the market changes and your profits are gone. Be sure to plan your “Walk Away” strategy.
Learn more about Trading the Forex Market. Stop by Gregor Anton’s site where you can find out all about Minimizing Forex Trading Losses.
categories: Forex Day Trading, Minimizing Forex Losses, Forex Online Trading, Forex Tips, Currency Trading, Currency Exchange, Forex Market, Forex System
