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Forex Basics

Reasons Why Your Forex Losses Might Actually Be A Blessing

Out in the real world, telling someone that your losses are a blessing might get you a few funny looks. However, in many walks to life, a loss can be one of your greatest tools, it can teach you far more about yourself and the performance than a win ever could.

Some of the worlds most famous investors, Warren Buffet, George Soros and many more have made some pretty huge losses, but that didn’t discourage them, instead, it taught them, after those losses they became a lot more successful at what they do and in the long run, they are thankful for those mistakes that they made.

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When you make a loss in Forex, it is important to treat that loss with respect, this means not just shrugging it off as a loss, this will not benefit you at all. Instead, it needs to be treated as a blessing, it is a chance for you to fully understand why it went wrong, why the trade lost and what you did wrong, then again, you may not have done anything wrong, it may be something in the markets, but the only way to know that is by looking at and analysis why that trade lost.

It is important to remember not to get too high or low over a losing trade, keeping your emotions in check and stable will allow you to properly develop your strategy and style in line with the loss.

Many traders will pick a strategy that they like, they will trade with it for a while and it’s great, it is making some decent profits, then the first loss comes, then another, now the strategy is trading negatively so the trade gets rid of it and picks up a new one which is profitable for a while, then it starts to make losing trades, the trader will drop it and pick up another one. You can see the cycle, and it is a never-ending cycle.

Most strategies are created with the current market conditions in mind, they will work while the markets remain consistent to the strategy, but as soon as thing start to change, and they always will, the strategy starts to make losing trades, instead of getting rid of the strategy and getting a new one that works now, we need to start looking at what has changed and why the strategy has stopped working. We know the strategy works, so why get rid of it, instead we need to start adopting it.

You should be keeping a journal of your trading, this is a fantastic source of information and we should be able to analyze it and work out exactly why the trades are now going wrong. Using this, you can adapt the strategy to the changing markets, change certain parameters, entry points, exit points and so forth, it is a much more economical way of doing it and it will increase your knowledge of the markets far more than just starting over with a different strategy that you hardly know.

Forex will always be changing, that is a given, it is important that you understand that you need to be moving with it, this means learning and adapting from your losses, it is the best way to learn and those losses truly are a blessing in the long run.

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