Forex trader's losses. Crash or inevitability?
A professional trader differs from an amateur in many ways, including the perception of trading losses. The axiom is simple: forex trading does not happen without losses, in fact - it cannot be.
You should not blindly believe the stories of the "gurus" about their brilliant strategies and break-even trading systems.
Remember the efficiency factor of machines and mechanisms. No machine has a 100% efficiency, although scientists around the world are trying to improve the efficiency of various mechanisms.
Can a trader incur financial losses?
As for Forex trading, the ratio of 7 profitable trades to 3 losing trades (70% efficiency factor) is a very good indicator. However, it sometimes happens, especially among beginners, that a negative result of three trades outweighs profit of seven positive entries, but it indicates absence or ineffectiveness of the trading system. If you are confident in your skills and know how the system works on a demo account, you must put up with the surge of negative emotions that can accompany losses.
Forex market is unpredictable and chaotic. No one can ever accurately predict the behavior of a currency pair. It would seem that everything points to the fact that it is necessary to open a buy order. It is opened. Immediately the market turns and a stop loss is triggered. Here is an unexpected loss! It turned out that there was some unexpected news, or someone said something, or even someone attacked someone. The market reacted and the protective order triggered. After all, a stop loss did not allow the losses to grow, and as a result, it has protected a large part of your account from possible further losses. So it wasn't all bad. The sudden rain that catches us on our way home is not the fact that a worldwide flood has started.
Neither is trading in the foreign exchange market. Making a loss does not mean you are a mediocre trader and your strategy is good for nothing. Moreover, making a loss even for an experienced trader does not mean anything. Every profession has its costs. You can't accuse a driver of unprofessionalism when he accidentally punctures a tyre. He will change the wheel and go on his way. A trader, on the other hand, often makes the major, if not fatal mistake of identifying himself with a loser. As a result, the sense of fear prevents making other trades, the sense of psychological discomfort drives the trader into a hopeless deadlock or, conversely, a desire to quickly win back the loss. All this leads to a depressed state and loss of sense of reality. And that is all. No deposit, no trader. And everything was so good at the beginning...
There is no Forex trading without losses!
What is the conclusion from all of the above? It is simple. Forex trading is not only, and not so much the mechanical opening and closing positions. The psychological state of a trader affects the quality of trading more than anything else. You should not give in to despondency of unavoidable mistakes and allow your emotions to overpower your mind. Remember that only strong self-control will help you achieve success in this difficult but interesting field of business.