Loss, Profit, And How To Manage Yourself in Forex Trading

Where there is a profit, there will always be a loss. This perspective needs to be embedded in every forex trader's mind when they try to manage their trades in the forex market.

It is said forex business is promising. Anyone who can do good trading, then he could fulfill his daily needs with profits from his trades. If he could increase it consistently, then his life would be prosperous and wealthy. But it is not that easy. How many people have fallen and bankrupt in this business? Most traders I met ended with bankruptcy. Even if today they gain some profit, the overall result of the month of the year is a big fat loss.

Don't Do It Full Time

There was a friend who told me that he would resign from his job and focus on trading forex. At that time we just chatted, and then we didn't meet again for a long time. Last month we finally met again. My chest thumped. Surely he is very successful now.

Indeed, it's true that he is successful, even extremely successful, I think. He has his own car, apartment, villas, and also a big one in Bali. Then, I asked him how could he be so successful. He said, Luckily I have a friend from Singapore who offered me a company in mining to be managed. Now I trade forex in my spare time. If I focus on forex only, maybe I haven't been able to buy these cars.

The point of that meeting is, finally I get an insight into this trading business. We should not quit working before the profit could sufficiently fulfill our needs. First, count how much do you need per month. Also, don't forget to count some spares for emergencies that could come up suddenly. If the result can't cover all that, then don't resign from your day job. It could be suicide.

Being a trader is not as easy as turning your hand. Study hard until you are consistent in your trading. Your work is the future of your family's finance. Don't just because of trading, you mess up your household life.

Losses Are Sure Gonna Happen

It is in human nature to always want wins and getting more profits. No one wants to get any loss in their business. But one thing you should remember is that every trader will experience loss. Do you think it's bad? No. Even if you get lost, it doesn't necessarily mean you are a loser. That was the result of your strategy, and as is with any other human-made system, it could experience errors, or in this case, the wrong signal.

A good trading strategy doesn't guarantee your profits. There is nothing like 100% accuracy. If let's say, your system has a 60% chance of profit, that means in 10 transactions, you could get 4 losses. That's the way it is, so don't grieve too much.

There are some traders who failed in managing their funds because they can't accept defeat gracefully. Why can't they accept it, even though they've known since the beginning that sometime they will lose? It is because the loss is too big. If your loss is still acceptable, maybe you won't grieve for it. So, the first thing you should do is put in a limit on how much loss you could bear.

And then, when you get to that point, accept it. Learn from the mistakes that were the driving force behind your loss, and fix it. If you have such good control over your emotion and money management, then you will be fine.