Newbies blowing up their Forex trading accounts is quite common. But being common doesn’t mean that it’s okay. Instead of crying your heart’s out after a failed trade. This should serve as a lesson to you that losses are pretty common in trading. It is said that about 90% of traders fail in their first year trading in the market. This percentage is quite alarming but there’s nothing wrong if you chose to believe it and make it an inspiration to strive more and learn strategies that can counter the risks involved in your trading.
Some of the most common characteristics of a trader that could drag her down, leading to a blown account are the lack of discipline, not following the original trading plan, cowboy trading, and worst, revenge trading. But you shouldn’t lose hope, there’s a bright side to all of these. Believe it or not, it is possible to avoid blowing your account. But before anything else, here are the four things that you need to be able to get back to your feet whenever you encounter losses.
Accept the Losses You Incurred
The sooner you accept that you’ve lost something in trading, the better. After all, it is not the end of the world. You can try again, come up with a better trading plan, and earn the money you’ve lost and even more.
Accepting your failure is the first step to recovery. Those traders who find it hard to cope with these losses, tend to think that they won’t be good enough and that they will never become profitable. But successful traders have a totally different mindset. They tend to understand that in trading, no matter how experienced and seasoned you are, you know that there are risks involved. They also understand that though blowing up your trading account will never be ideal, it will definitely happen to any trader, sooner or later.
So, instead of inflicting doubts on yourself and getting sad, see this as an opportunity to learn more, improve your strategy, and grow as a trader.
Check What Possibly Went Wrong
Seeing the reality that you have lost in trading, it is time to start asking yourself as to what you’ve gone wrong. This question can be so tough if you don’t have a trading journal where you can look back to. But, if you have one, were you eager to write every bit of detail while you trade?
Did I over leverage?
Did I execute my trades according to my trading plan?
Is my trading plan perfect for me?
Check these things and determine what you got wrong resulting in a blown account. Check if everything would still be the same if you’ve done a different strategy.
Demo Trading Helps
If you haven’t tried Forex trading on demo accounts then you’ve missed something really important. If you’ve already experienced demo trading then returning to it is never an issue. Just remember that safety practicing is no shame. Therefore, set aside your ego and go back to demo trading.