HOW DO YOU MANAGE LOSING STREAK?

#OPINIONLEADER# #OPINIONLEADER#

Losing streak in Forex trading refers to a string of losses, a situation where a trader experiences up to 5 to 10 losing trades without having any single trade that closes as a win/profit.  

This is one experience that is hardly discussed by Forex traders but it is a very important subject that is key to becoming a profitable trader in the long run.   

When losing streak occurs, various pictures are painted in a trader’s mind, which raises questions, assumptions and suggestions such as “Maybe I made a mistake” “My trading strategy don’t seem to work” “I should take bigger lot size to recover my losses” “I should look for a better strategy”. Losing streak leaves a thousand and one questions and suggestions at heart.

Few Factors that could lead to Losing Streak.

(1) The Trading strategy is good but losses are inevitable and no strategy would give you 100% win rate

(2) The Trading Strategy is not working and traders need to improve on trading approach

(3)  The trader’s attitude towards trading is wrong, example. Some traders trade randomly, adding multiple trades on an already existing losing trade in a single pair, having a push to take trades all the time e.t.c.

Note:

Losing streak doesn’t necessarily mean that things are going wrong depending on trading system; some trading systems are designed to cut losses short and let the wins run. Example -3 to -5 pips for loses, and + 50 to +100 pips for wins. Losing streak is a part of such trading systems and thus won’t affect such trader at all.

Winning streak doesn’t also mean that things are going well, depending on trading system.

HOW I MANAGE LOSING STREAKS.

There are various ways people manage losing streak successfully especially when emotions is beginning to set in, but I would mention a few.

1.      Take a break: If your losing streak is making you emotional, then it’s time to take a break. Certain emotions like anger, revenge e.t.c could cause more harm to your account.

2.      Take fewer trades per day/week: Deciding to take fewer trades e.g. “3 trades per week” may help control your emotions, reduce your risk exposure and ensure picking premium trades pending when you are psychologically stable.

3.      Reduce your risks per trade: Reducing your risks (e.g.” risking 0.1% per trade”) may help you rebuild your trading confidence in your strategy; this is not for the purpose of making profits, but to help come back to become better.

The three points I had mentioned are a few out of many.

 HOW DO YOU MANAGE LOSING STREAK?

You could share your idea in the comment section.