A key to successful Forex trading over the long-term is to avoid the big losses. Experienced traders monitor their positions constantly, adapt to them and take losses when necessary. Big losses in Forex trading are bad because of just how debilitating they can be in an enduring manner.
It is said that successful Forex traders view losses based on the profit needed to restore the original equity value and that unsuccessful traders evaluate losses based solely on equity lost. Consider that if you suffered a 50-percent loss, you would need to earn 100 percent on your capital.
Good money management is essential to successful Forex trading. There’s more than one valid, successful approach to money management, so you need to study the options and choose the one the best suits your trading personality. Then you develop your entire trading plan around that system.
Finally, you need confidence in your plan, and you need to remain disciplined. Debilitating losses happen due to bad choices not misfortune. If you stick with your plan and get out when you should, you’ll never suffer the big loss. If, on the other hand, you let greed or fear get in the way, then you might.