Novice traders should take into account that the forex market is a place where you can both make money and suffer significant losses and even completely lose the deposit. It is not unusual for beginner forex traders to wind up completely wiping out an account through a series of losses or poor risk management. While this unfortunate scenario can be avoided with the right amount of trading knowledge and discipline, it would also help to have a battle plan to bounce back from blowing up your account.
The first positive step towards recovery is accepting and acknowledging your losses. Some traders allow the negativity to sink in, causing them to believe that they will never be good enough to be consistently profitable. Successful traders push through and understand that there are risks involved in trading. Furthermore, successful traders know that while losing an account is not ideal, it is certainly a reality that can happen to any trader. Instead of moping around and doubting yourself, you should look at it as an opportunity to learn, grow, and improve as a trader.
After accepting the reality of losing your money, look back and try to figure out where you went wrong. Did you risk too much on each trade? Did you overtrade in an effort to recover money lost on a bad trade idea? Were you over-leveraged? Did you fail to conduct a proper analysis before taking trades? These are just some of the questions you can think about when analyzing your decisions. At this point, you should have a trade journal that you can review in order to pinpoint the mistakes you have made and how you can avoid them in the future.
Whatever you do, do not try and regain all your losses by undertaking a "solve it once and for all" type of trade. This is trading suicide and you will only endure further larger financial losses by adopting this approach. If you feel that you have a need compelling you to trade, then you should do so by risking only small amounts of your budget. You must always exhibit good levels of discipline and patience. You will find that this is best done by trading a well-developed and thoroughly tested trading plan. You need to follow a set of instructions that clearly identify good entry and exit points for all your new trading opportunities.
Trading losses should be accepted as a part of the trading process, and you should not let yourself to be easily discouraged. If you don’t believe in yourself, nobody else will. It is up to you to pick yourself up and keep going along your path. This time around, make sure that you stick to your trading plan – no matter what! You may not see your profits build up right away, but being a disciplined trader is a major victory. Over time, you will see yourself improving and the bottom line, the results will speak for itself.
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