Handling a Losing Streak like a Guru

(eToro Blog) No one likes to lose, but the bottom line is there is no trader who hasn’t at least once suffered through a losing streak. Statistically, losing happens to everyone; from the newbie trader to the guru’s guru and it happens regardless of trading strategy or money management prowess. If you can review their history you will find that even the most successful traders have had losing trades during any given year; what makes them successful, however, is their ability to maximize their profit on the trades that win, and minimize their losses on the trades that don’t. There are several things that you can do to minimize your potential losses.

• Keep as detailed a trading diary as you possibly can, and if you haven’t ever begun one, there’s no time like the present. You can use the diary to evaluate a common thread or a past pattern among the losing trades, which could give you the opportunity to make the necessary adjustments.
• Minimize your trading activity. Lower the numbers or pairs of trades or the markets you trade in if you trade in more than one. The fewer factors that you need to watch the better you can analyze and alter the possible outcome.
• If minimizing your activity wasn’t the success you’d hoped for, it might be time to take a breather. Paper trade or demo trade for a while until you get trading groove back. Once you’ve restored faith in yourself and your abilities, and realized that your trading methods are sound (or tweaked them if they were not), you can be a little more aggressive.
• Understand this: “Hail Mary” passes don’t always work in football, and they surely have no place in forex trading. You cannot rescue a bad trade by digging a deeper hole. Successful traders can survive a rough patch only through dogged determination, discipline, patience and prudent trade.
• Above all, keep your emotions in check. A losing streak isn’t an anomaly; in forex trading or any kind of market trading for that matter it’s almost a rite of passage.

How you handle your losing streak, whether it keeps you down for good or reinforces your convictions that you’ll get past it – stronger and wiser – is the ultimate determinant of you as a winner or a loser. If you have a strategy that has helped you pick yourself up, dust yourself off and get back on track why not share it with us.

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