Losses are part of trading

Rambo35

Corporal
Messages
280
I think no matter how good you are as a trader, you will not always get every trade right and you will face a trading loss every so often. In my opinion that is perfectly normal and part of trading and risk management prevents that loss from having a big impact on your overall portfolio.

No trader likes to record a loss, at least I never met a happy loser. I did come across an article on the Paxforex blog which made me think about it (Losses As Inevitable Part of Forex Trading). I guess everyone has a different measure for success and failure, so I was wondering what you classify as a good strategy for yourself? Do you look at how much money you generate, the percentage of your trades you got right, etc.?

I ultimately measure it by how much money I have earned and if the returns are consistent.
 

Pharaoh

Colonel
Messages
19,905
People looking for "never lose a trade" situations will lose it all. You WILL lose trades. If you try "hold and pray" to avoid all losses, someday Mr. Margin will come calling for you.

Basically, it boils down to (% wins x average win) - (% losses x average loss). If this number is positive, you are making money. If it's negative, you are losing money.

The next steps are to increase the % of wins and to improve your risk/reward ratio.
 

Pipsqueamish

Recruit
Messages
9
Of course losses are a part of trading. No-one will ever have a perfect record. But that's what the demo accounts are for. If you can't get yourself to a place where the majority of your trades are successful, ie. if you've failed to develop a system that gives you a statistical advantage, however slight, you can forget going from demo to real money.

And then there's also trading psychology to keep in mind. It's how you react when trades don't go your way that makes you a successful or an unsuccessful trader.

In my experience there are just too many things to keep track of. There's no such thing as a perfect trader, but you take as many tools as you can on board, you make them your own and you try and give yourself an incremental advantage, tool upon tool, covering as many bases as possible as you develop.

It really is a life-long process.


Good luck with it and happy trading!
 

itkraze

Private, 1st Class
Messages
200
Profit and loss is the part of every business so in trading if we always trade with proper planning and strategies then we will be able to earn good profit and minimize the loss factors in Forex.
 

Floriano

Recruit
Messages
70
I think we trading should be done with proper planning so we can only avoid losses and minimize the loss factor.
 

Pharaoh

Colonel
Messages
19,905
Profit and loss is the part of every business so in trading if we always trade with proper planning and strategies then we will be able to earn good profit and minimize the loss factors in Forex.
I think we trading should be done with proper planning so we can only avoid losses and minimize the loss factor.
Is there an echo in here?
 

faysal13

Recruit
Messages
10
Brother, Not only Forex business but also every business have losing part. But do not angry when you loss your capital. But try to learn by your mistake. And find out the reason of your losses. And if you can learn by your mistake then you never do same wrong here. So your mistake is your teacher in the Forex business.
 

Bearad

Recruit
Messages
12
You say the right things, and losses should be taken as part of trading and not overreact to losses. I always advise you to keep a trading journal to analyze your mistakes and avoid similar situations in the future.
 
Top