Four Stages in Dealing with Losses

December 22, 2013
loss forexOne of the things that you should learn in forex trading is to recognize the error that causes harm . Although it is normal in the process of trading , but losses are usually difficult to be accepted by traders , because of course involves a number of missing funds . The main reason traders find it difficult to overcome the consequences of the loss is due to ignorance rather than psychological problems .


Traders who suffered losses usually do not know that the resulting negative emotions can lead to despair . They are not able to respond quickly and wisely losses despair , could have left the world of forex trading . In addressing losses in trading , there are usually four stages of experienced traders . Increasingly trader can survive , the more he will be able to accept losses in trading .The first stage : denial of the fact that forex trading can cause lossesEspecially for novice traders , it is often experienced rejection stage . In this phase the trader refuses the fact that he may suffer losses as a result of his mistake . He will tend to blame the brokers who fraudulently or market conditions were not favorable . The reason often given is that the broker is the stop loss hunter ( hunters stop loss ) , or a market suddenly reversed direction , whereas the entry conditions are correct . If they survive , they will keep going .The second stage : logical reasoning and reasonable ( rationalization )After experiencing a denial stage , usually a trader entered a stage of rationalization in trading setup . At this stage the trader starts making a trading plan and trying to apply it . He also tried to use money management properly , set a stop loss , profit target is accompanied by the appropriate entry point to the trading method that is logical and makes sense . When experiencing a loss , they tend to ignore it and sometimes admitted that he had made a mistake .The third stage : depressionAt this stage the trader has seen all the external factors that could affect trading results , including the possibility of causing harm . Traders then began to think that they experienced losses caused entirely by his own actions . Although it is reasonable to take responsibility for the loss that has been suffered , too blame themselves could destroy his trading career if he always doubt his ability . Questions such as '' Is forex trading is suitable for me ? '' Will always arise , and if the trader can not cope with feelings of depression and correct the error , then he will be able to unplug from the world of forex trading .Fourth stage : accept the fact that losses will occur in the tradingIn this last stage the trader can fully realize that it is not right to blame yourself too . The movement of the forex market does indeed can not be predicted with certainty , and many factors beyond himself that can not be controlled . Traders began to make improvements on trading strategy , implementing risk management with proportional and foremost , be addressing losses by accepting the fact that it is not inevitable .
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