Losing can be a part of winning at trading. It takes a long time to face the losses without having an emotional breakdown. You should accept losing as the normal part of the trading process, but both professionals and beginners may face difficulties with this. We believe it happens because of a lack of knowledge and having a poor trading psychology.
In this article, we will try to discover the knowledge gap that is dealt with the losses. We are going to discuss the various stages of it in CFD trading, such as denial, namely, rationalizing, acceptance, and depression. By knowing about these four stages, beginners will be able to handle the losses.
Denial is the first stage, and we should not deny the consequences for our actions. Smart traders usually accept the reality and look for the next trade signals with great patience. Even successful traders face losing trades after evaluating the important market data. Sadly, rookies cannot accept the fact that they can lose trades after doing all the hard work.
Due to the unpredictable nature of this market, you must prepare yourself to accept the losing orders. As a beginner, you may think that you are never wrong about the market. But this is not all true. You should remove your ego from the equation so that you can move on and survive even at times of greater risk.
We go forward to rationalizing trading set up after the stage of denial. This is the very point where beginners make the right decision to sharpen their ideas regarding trades and do not think about what mistakes they have made. Beginners research critical factors like stop loss, profit target and entry points before taking any trade. After losing trades, they do not accept the term that they have made some mistake. Check here and go through the educational contents at Saxo. It will improve your analytical skills and you will be able to do much better at trading.
Beginners should try to find out all the possible reasons those are externally responsible for the loss. Eventually, they get the fact that it happened because of our and their wrongdoings and get depressed. Though newbies should take reasonable actions to mend their losses, they become self-destructive and ruin their trading career. Always be aware, frustration can be fatal in trading profession.
Consistently doubting ourselves and blaming the external facts can lead us to unprofessionalism. It will be reasonable to take responsibility for our loss and beat depression with logical thinking. As a rookie trader, you might ask, if CFD trading is really for you or not. Educate yourself properly so that you can determine whether trading is going to be your life-changing event. Unless you can find an answer, you should never start to trade with real money.
We should not blame ourselves for everything which gets wrong. Though, indeed, having loss is partly our fault, we should be mindful in this case that there are mindful of things that are really beyond our control. Forex can be compared with a wild, untamed beast, and it may become so tough to get control of it sometimes. But, beginners should not be okay with this and instead try to take new actions based on these.
At the bottom line, it can be said that a beginner may face these stages while dealing with the losing trades. Experts try to overcome these gradually by thinking and implementing the solution patiently. The realization of loss may help to protect ourselves in the future. So, try to think like an expert and learn to accept the unexpected. Never trade with high risk since you know nothing is predictable in this market. Be prepared for the worst-case scenario and look for the high risk to reward ratio trade signals.