Maybe people are wondering already what this article is about! Traders commonly do not differentiate between losses and every failure is treated equally. Still, we are telling you this is not the same and many will agree after reading this post. In this article, we are going to describe this concept and explain how each impacts the career.
Initially, this will seem complicated but with sufficient explanation, traders can realize the differences. Before you start reading this material, take a deep breath, and calm the mind. Contradictory beliefs may appear but keep on reading. As you proceed, the deconstructed image will begin to take a complete form which will eventually make sense at the end.
What is a good loss?
At first, we are going to describe good losses. This is calculative outcomes that were expected before making the decision. The method implement was good but due to natural volatility, the plan did not work out. To put things into perspective, consider buying a new computer. You are not certain whether the shop is open but taking this uncertainty into account, to have made decisions to go onto other destinations if the first one is closed. Unfortunately, the shop is closed due to unavoidable circumstances, let’s say employees were having an annual meeting. This decision represents a good failure because the outcome was natural. Similarly, investors plan but not every strategy works out accordingly.
When stop-loss is set at an appropriate position, a backup plan is used the unexpected result is a good one. The trader was right but due to natural circumstances, the volatility did not favor the decisions. In the forex, these situations do not hinder the progress because of preparations. Before investing capital, check whether a failure falls in the good or bad loss category. 20% failed attempts are accepted as this is natural to occur. If this rises, sharpen the skill to reduce the failure.
Don’t get crazy about the losses
Just because you are having good losses, doesn’t imply you have a well-balanced trading strategy. Even after getting the best trading accounts, people mess things up and loses too much money in a row. You have to know when to stops. At times the good losses turn out lethal as you don’t anything about the industry. You have to study a lot about the losing trades and this should give you a strategic idea of how to open trades with more confidence. Over the period, the market structure will seem more rational and you will be able to earn more money. You can also rely on the autochartist from Rakuten Securities Australia to find some good trade setups.
The concept of a bad loss
This implies an unexpected outcome which results from overtrading, greed, holding the positions after surpassing primary goals, trying to implement shortcut to boost profit, etc. Traders become greedy and want to make a fortune overnight. Instead of focusing on dangers, potential profit is prioritized. Remember, if any failure can be contained but individual traits have prevented from doing so, this is a bad one. To cut the long story short, losing capital from silly mistakes or carelessness is a bad loss. A person needs to develop maturity before he can take control of the fund. Trading is very persuasive and brokers can manipulate people by alluring them to undertake risky measures. Without strict controls, accomplishing goals is never possible.
How do I master this method?
At first, focus on saving investment. Do not attempt to make a profit but keep the balance safe. Gradually improve the performance but never undertake unnecessary risks. Forget greed and learn to take logical decisions derived from analyses. Soon you will become a master who can make consistent money even with frequent losses. Never try to have a perfect winning streak because this is impossible. Balance is required in every aspect of the forex that makes an individual stand out from the crowd.
