Forex can be an all encompassing daunting place for a newbie, in fact it is one of those places where one can not only make a lot of money but also a place where one can lose a lot of money as well. It is just part of learning how to trade. One of the biggest questions many ask is, how to stop losing trades in forex? This is a good question and from my experience with forex I will lay out the best answer for you from my own personal journey and what i have experienced so far in the Forex Markets.
Please be aware I have lost money too and i have also gained money from forex, at first losing seemed to be the easiest one. However like anything in time one can improve and get better and better so i will begin with my list of tips to trading winning trades rather than losing trades.
10 Ways to Stop Losing Trades in Forex
- Always start small – When a beginner to forex always start small with your first trades for weeks and weeks until you feel you are getting a higher than 80% success rate. Do not start big, you will lose it, forex is very emotional and not a place for gamblers.
- A good starting trade for those starting out in forex is a mini account (less than $400 dollars), you can do a demo free account but you will find it will not be the same as real money which is what you need to learn. Instead start small and risk little money. An example of a trade that is little to me is 1 trade of say buy trade of aud/ usd 0f 20 dollars at risk level 50 or smaller which does a pip count of 10 cents or lower. That way if you lose a trade it is only a couple of dollars, not hundreds. That is a hard lesson to learn that many do unfortunately.
- When starting out copy successful traders, this can be done easily on the Etoro trading platform which has the feature of copytrader. This awesome feature allows you to see ranking on all traders in the network and if you like one copy them for all future trades. Always pick a 90% or higher success rate trader with this one as a good tip.. For more on Etoro.
- Don’t walk in think forex is an easy get rich quick scheme, while it can be a way to sure wealth in order to achieve that you have to learn how to do it properly.
Keep your emotions out of trading, trading should be seen like any real business with a real business plan, don’t just Set it and Forget it – With forex the most successful traders put in a trade with a good deep stop loss with easy achievable take profit margins. What this does it it allows the currency to drop and return past profit while you are not at your computer. While this is not a guaranteed success method it has a 95% or better ratio. To do it right however takes practice. And you still want to buy when the market is heading that way as well.
- Always buy a short trade when resistance breaks – This is one you have to learn the hard way. Learn to be quick on the buy button when the conditions are right. What do i mean by a short trade or resistance? A short trade is where you just try to take a few to several pips out of the market. There is nack to doing it but it takes time. Resistance is where all of a sudden a currency breaks free of the battle against another currency and bounces up quickly or bounces down quickly. This one takes practice and timing.. A good short is 5 or more pips and at a mini account of 10 cent pips that is 30 cents or more. I know it is small but this developing a way to stop losing trades..
- In time after 10 or more small trades making a few good dollars, then think about looking for the 20 cent per pip trade but be ready to lose all your winnings. This is okay and a learning process as well. It takes time. If it wins however then it pays off and if it loses cut the trade before you lose and break even..
- Look for the good trades, they are out there, it takes a bit of time to find but learn to not trade on emotion, instead look at exactly what each pair is doing.
- Use a Forex Robot – While I have not tried this one myself, many rave about two big robots time and time again which apparently have over 96% success ratio. What a robot does is analyse the market conditions and looks for weaknesses to buy and sell at a profit. Some people claim to make over $10,000 a week from such robots and software. And that is on autopilot. These two recommended mostly are Fapturbo and Forex Megadroid. Use both of these carefully and always ask what the recommended settings are.
- One trade at a time – Unless you are copying a professional trader that knows what they are doing such as on Etoro then just do one trade at a time. I know it is small earnings, make daily goals of say 5 dollars a day, then raise it once achieved to ten dollars a day. Many rush in trying to get as much out as possible when there experience is small, this is the same as gambling if you ask me, learn and improve over time..
- BONUS TIP – Buy low spread currency pairs rather than high spread pairs, aud / eur is under 3 and so is the aud / usd two I like overall
- BONUS TIP 2 – Buy when the market is right, usually the London gmt time is best for trading ( most pips overall ) which is from 6pm AEST to midnight in Austalia time zone. Look up the GMT time for your area to correlate the time zone.
Number One Way to Lose Money in Forex
The overall number one way people lose money in Forex when they are new to it is because of emotions. People have a hard time realizing that the forex is out of there control and so they blame themselves or others and at times can really make it difficult on themselves when trying to learn to trade this amazing market. Emotions need to stay out of the forex at all times, instead plan your trades well and have an amount planned as well that you are willing to lose on each trade.. This saves the stress..
Number One Way of Making Successful Trades in Forex?
For a newbie other than copying someone that is a trading king, such as on Etoro as i mentioned above is to look at yourself. Take emotions out and do trading for the long haul no matter what happens with each trade. As an example do a 20 dollar trade on a mini account look for a good time to buy or sell depending on preference then work out a take profit around ten or more pips in front of where you want to go, then set a stop loss at a good distance to avoid the currency hitting it if things go bad and allowing it to do a recoil which happens so much in Forex.
What i mean by recoil is a curreny pair goes down, then it can return half an hour to two hours to days later. It’s all mathematics this one, on occasions it does not return then you may lose the lot, however it gives to best chance overall on each individual trade you do. Over 90% to be exact. Indications to watch out for here are is the currency at a resistance level or can it go higher, is it resisting against the opposite curency meaning chances it will drop. If so wait patiently for the drop or rise depending in the situation, then click the buy or sell order and bam walk away. Let the stop loss and take profit decide. If by doing right and it rises, feel free to adjust the stop loss into the profit zone and take profit one to move up as much as it can. From time to time check and see if it needs adjust in the profit zone.. Then all you have to do is hop for more than 50 pips.. It does happen everyday..
One aspect to keep in mind is the forex is not fully controllable, by understanding this it actually gives you more control…
Last Thoughts on How to Stop Losing Forex Trades
Overall like any market, learn how currency pairs move, don’t rush in, just relax breath and look for an opening, if an opening does not appear then just wait or try later. Not every time is a good time to buy currencies.