If you’ve recently started trading forex and you’ve found yourself losing money, you’re probably feeling discouraged and you might even feel like quitting. After all, articles and information online make trading sound easy, which likely led you to develop expectations. Losing your initial investment can be a huge disappointment and it often leads traders to give up entirely. But it isn’t too late if you’re in this spot – we can help.
The first thing you need to do is to figure out if you spent enough time educating yourself about forex trading before you jumped into it. While trading, did you have issues navigating on the trading platform and performing simple tasks like placing orders? Did you ever find yourself confused by the terminology? Do you feel that you have a good understanding of concepts like risk-management and different types of trading strategies? If not, then your biggest problem likely stems from the fact that you simply need to spend more time online reading articles, watching videos, and taking advantage of other free resources that will teach you everything you need to know. You should also practice on a demo account to gauge your progress. If you feel confident that you know everything you need to know, then you’re ready to move on to the next step.
Instead of freaking out over your past mistakes, you have to learn from them as a trader. Yes, losing money hurts, but it is part of trading. What really matters is that you make more money than you lose. If successful traders gave up after their first couple of losses, then nobody would make it as a trader. One of the best things you can try is keeping a trading journal to log every trade you make, along with the reasons why you made the trade and how much you made or lost. Then, you can start to analyze this data to look for patterns or identify issues that are affecting your trades. Maybe you’ve been forgetting you opened a trade, getting distracted around a certain time of day, suffering from trading anxiety – logging all of this data is the best way to figure out what’s going wrong.
A lot of traders suffer once they resume trading after taking a large loss. Even if the trader is confident in their strategy, they may be afraid of making trades because they don’t want to suffer another loss. Anxiety is a good example in this situation, as the trader might feel overly anxious, which leads to a problem known as analysis paralysis. Traders suffering from analysis paralysis make delayed decisions or fail to enter trades altogether because they are too anxious about the outcome. Anxiety and fear often affect traders that have recently taken a loss, but it’s important to overcome these emotions so that you can make level-headed trading decisions. The first step is to realize whether this is a problem that is affecting you, and then you can find multiple resources online to help you deal with it.
To summarize, there are a few main problems that can cause problems with your trading, especially if you’ve lost money in the beginning:
- Not having a proper trading education
- Fearing failure
- Fixation on mistakes rather than learning from them
- Feeling anxious, fearful, or overwhelmed once you resume trading
- Failing to keep a trading journal to log your progress
- Feeling less confident in yourself
Successful traders understand that losing money is just part of trading and don’t spend time fixating on their losses. It may seem difficult to move on, especially if you don’t have a lot of money to invest. If you’ve had difficulty with trading thus far, you shouldn’t give up yet. Try to figure out which of the above problems is affecting you so that you can fix these issues without walking away from your trading career.