Learning To Love Your Losses In Forex Trading

Learning To Love Your Losses In Forex Trading

Suffering from a loss can be extremely devastating, especially if you are a first time trader. However, for the veterans who have had their fair share of the worst losses in trading, you should not be crying over small losses, especially the first ones that you make. Instead, you should give them appreciation. Love your first losses and just chalk them all up to experience.

Using Losses As Guides

The point in trading is to make yourself earn more than what you lose, and not earn as much as you can without losing anything. The latter is the principle that most first time traders often consider big profit. You will never feel excited, exhilarated, and only exhausted and worried about what is going to happen in the market if you focus on preventing losses from happening, because they will happen to you eventually, and there is simply nothing you can do about it.

Let us use the example of ten sets of basketball games, and for every time that your team wins, you earn a hundred dollars. If you win six of those games, you end up making more than what you have lost, and you have earned an extra two hundred on top of what you can use to make up for your loss. As long as you are making more money than you are losing, you are not being defeated in trade. Instead, you are earning, and the only thing you need to do in order to continue towards this upward trajectory of success is to keep the ratio between your wins and your losses far from each other, with your wins overwhelming your losses, of course.

Your first small losses will also be your first real teachers in foreign exchange. Remember that no master has ever learned as much as they have if they have not experienced losing or failing at least once in their lives. The same goes with trading. Small losses will open up your horizons and will make you realize that not all investments, markets, and trends are either good or worthy enough to follow.

So instead of sulking because of your losses, lift your head up high, smile, and use your losses as experience points in finding out the best strategy you can take in order to make smaller losses and become more and more successful in the world of trading and foreign exchange. Appreciate your losses and they will guide you to success.