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 successful trades, lets focus on minimizing your Forex 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 – Follow your trading plan, system, and strategy, and don’t change it mid-stream. Know your entry and exit condition and don’t babysit that 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 plan, set your stop losses and take profits. Set your alerts. Walk away or do something else.
* 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. Greed is an emotion and you want to keep your cool and stay focused on practical trading. Emotional and impulse Trading is Gambling.
* Save Your Emotions – Relax and you’ll trade better. 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. Save the emotions for when you celebrate a good week!
* 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 – And you thought it was your friend… It will change and according to some the Forex Market is Trending only 20% of the time.
* Set Goals – Know exactly how many pips you are targeting. How many good or bad trades you’re going to stop at. Everyone has bad days… I 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! …and follow it.
* Set Conditions – When are you going to enter/exit a trade? What is your Stop Loss / Take Profit? What are the market conditions? Market hours? Will you Trade around news times?
* Economic Calendar – The Forex Market tends to become volatile around news times. This “noise” can really impact your trades. Some people stay away from news times. Others trade news times exclusively. Stay on top of Forex News by checking the Economic Calendar at least daily and figure out what kind of trader you are.
* Manage Your Money – Only Risk 5% at most. Combined. If you have multiple trades, the sum should be 5% or less. Some people like 3%. Any more and you will have a tougher time rebuilding your portfolio after a bad trade.
* Know Your Risk / Reward – How many pips are you willing to risk to make your pips? Are you going to risk 100 pips to make 10? Clearly you want to risk less than you are bound to make.
* Practice Practice Practice – Open a demo account, thoroughly test your system, plan, and strategy. And please don’t change it every day or hour and stop looking for that holy grail. 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.
