#fxpearl

Beginners tips to stop losing in Forex trading      

It is no surprise when The Bank for International Settlements (BIS) published “11th Triennial Central Bank Survey of Foreign Exchange and Over-The-Counter (OTC) Derivatives Market Activity” nothing that turnover in global FX markets averaged $5.1 trillion per day in the year 2016. People who are already in the Forex trading could have taken it as a normal consequence while the beginners could see it as an invitation to trade in the huge potential of foreign exchange market! Well, when you are a novice in the sector, there is a chance that you may get excited same way to float your investment with the current of the foreign exchange (Forex) trading. The immediate result of such a decision taken in excitement could work towards the annihilation of your optimum desire of winning big in Forex when your steps are found misplaced.  

Now the question is how to avoid such situations of early losses in Forex? Can’t there be anything to pull out of such condition which is similar to quitting the market permanently? Yes, there are some simple to follow tips to stop losing in Forex trading; some tips noted below are proven to help the beginners and experts alike:

·         Come out of frustration – You invest in Forex trading and see your investment plunging down as a loss and a few such repetitions can lead to fast mental depression. The worse in such situation remains the next wrong decisions to be taken to get in more trouble out of frustration. So try to cool yourself down and come out of these initial setbacks. Stop for a while, a day or a week and then you can take the right step.

·         Differentiate probability from certainty – As a trader, you have to take advantages of probabilities of the Forex market and need to understand the basic difference of being probable to certain. In Forex or in any other sort of trading (stocks or commodities etc.) you can take confidence in the most probable result. But you need to remember that there cannot be any certain outcome that ‘anybody’ can predict. So you have to make your mind that you are investing on the probable profit, not the certain gain. If there is a loss, accept it and try to analyze the investment channel to go closer to the expected result in the next time of investment.

·         Learning to stop your loss – Beginners have the tendency of placing “stop loss”, at random with a primary thought of trading at a bigger position size. They place stop loss at “20 pip stops” or “50 pip stops”, etc. at random without having those based on any level of the market. They do not understand that the price should have to breach a level to ‘prove’ any trade speculation wrong. No stop loss is worth justifying if it does not invalidate a view showing any fact-based evidence or a breach in any logical nearby level of support or resistance a person thought of. You have to understand the context of the market you are trading and at the same time, you need to determine what level a price would have to break through making your technical understanding of reaching that level wrong.

·         Set limit against over-trading – You have to understand what is over-trading. It is very difficult to mark a level of trading as ‘over-trade’ as it varies according to individuals (a limit set as per trading strategy or trading edge one can stand up to). So it is easy for others to say someone is over-trading but the person involved in over-trading realizes after huge losses as a result of not having set their custom trading strategy to stop losing in Forex trading. As a beginner in the foreign trading market, one of your primary tasks should be setting your trading edge and adhere to; otherwise get trapped in the over-trading, thereby quick loss.

·         Educate yourself in Forex trading – There is no doubt that educating yourself in foreign exchange market behaviors, trading aspects, criticalities, terms and related information would protect you facing the loss or stop loss in Forex trading. Educate yourself against raw gambling in Forex. It is always good to train in Forex trading through demo accounts before you start investing in Forex - one of the most volatile yet profitable trading media.