“Why do we fall? So that, we can learn how to pick ourselves up.” This single quote from Batman Begins is motivational for those who fall in their lives, including traders. To deal with a cycle of lose streak in Forex trading is not a painless effort. Many, in fact, find it problematic.
Louis Teo, a market strategist for Fullerton Markets, states that losing one or two Forex trades is normal, but it is not if it is five or six times in a row. That said, Teo also wants traders to understand that a forex lose streak is normal, even successful traders have more losing trades than winning.
However, what is hapless is that traders tend to stop after such devastation for not being able to cope with their current condition. For that reasons, Teo shares several ways to deal with lose streaks.
Also Read: How to Bounce Back After a Trading Loss
Examine Trading Diary and Statistics
Teo believes that it is paramount for traders to understand their win rate. Hence, in order to accurately do so, traders require to examine their trading diary.
A good trading diary helps traders track the records of their wins and losses in trading. Following the examination, traders can make an adjustment to their strategies and when to trade.
However, Teo also suggests that it is better to stick to a well-established Forex trading strategy in a lose streak rather than to fix it. This is, indubitably, if the strategy suits the market condition.
Learn to Take a Break after a Lose Streak
Lose streaks are depressive. When encountering lose streaks, an ‘emotionally fragile’ trader tends to trade randomly and deviates from his/her strategies. This is dangerous.
To avoid this implicit, imminent danger, it is highly necessary to take a break. A break, for about a couple of days, helps the minds recover from the jeopardy of losses. Also, Teo underlines that it is more essential to know when to not trade than when to trade.
Do Not Attempt to Gain Big
Lose streaks indubitably prevent traders from gaining profits, but attempting to gain big to cover the missing profits is not justifiable. This is so for no one truly knows the outcome of each trade. What if it results in more losses?
Although not recommended, trading through the losses is also an acceptable way to cope with lose streaks. However, it is better to conduct smaller trades that risk less capital until the trades result in wins. After gaining a few wins, it is then reasonable to resume normal trades.
Also Read: 3 Types of Stop Loss to Minimize Your Trading Risks
