Your first time failure on the market may give you alot of hard time than you can actually anticipate. It’s normal to fail when trading and it’s also normal to get scared after making a loss.
When you suffer your first time loss trading, some how you will feel like giving up. Or feel like it’s not the right place for you.
Sometimes you doubt if it will really workout. The reality is, every successful trader has experienced that too. They have had their first time failure on the market. But how did they deal with it to become successful?
Your trading journey has just started. Therefore, you don’t need to rush yourself at all. Just take a deep breathe and start again.
Let’s now dig in on some tips on how you can deal with your first failure on the market.
Accept your feelings.
To overcome your fears, you must accept what you feel first. You may feel disappointed in you and the market. You may feel scared, confused, regret, frustrated and hopelessness. All this is true. It is actually happening and it’s okay to feel that way. Don’t try to run away from your emotions, embrace them and try to confront your feelings.
Take time off trading and try to learn your mistakes.
When you confront your feelings, you will know what went wrong. This will help you not to repeat the same mistakes gains. In that case, try to study yourself first and find out where you went wrong. Ask yourself questions like;
Did i follow my trading rules? Did i predetermine my risk of trade? When i took the trades, did i take a trade before it confirmed? Did i just let my winning trades turn into a loss? or did i fully accept the loss? Did i trade with too large position?
if you can acknowledge your mistake, then you are good to go. Observe yourself objectively and acknowledge your mistakes. Know that mistakes simply point to areas you need to focus your efforts to improve.
Start Trading again
Forex Trading is not something you can master in a blink of an eye. It requires patient, persistence and discipline.
Since you now know what the cause of your failure is, it’s time to avoid the mistakes and act accordingly. Trade as you evaluate yourself until you get rid of the common mistakes and errors that cause your failure.
Write down how you feel about every action you take in the market and review it at the end of every trading day.
in case it’s your trading strategy that is not working, drop it and pick another one. Start again, practice on a demo account until you get what you want.
Set goals and manage your expectations.
it is every traders dream to win trades and make a lot of money. No one ever thinks about making a loss. If you want to achieve that dream, then you must learn to manage your expectations.
You don’t expect to make a million dollars on your first attempt of trading! do you? or to become the wizard trader just like that. Making losses is part of your trading journey that you can’t avoid.
Having very high expectations in some way is one of the reasons for our failures. Don’t just seat on your computer convincing yourself how the market will work to your favor because you don’t want to take a loss. Your mind tells you so but the reality in the market says otherwise. You can’t see that actually the trend changed already because you are blinded with the false belief.
setting goals as a trader helps you to know your risk tolerance, risk reward ,when and what to trade. However, you must have simple and achievable goals. Use your first failure on the market to establish your goals and your expectations.
Failing on a trade is okay but consecutive failures are bad. Find the reasons for the cause of your failure and work on it.
Remember, success takes time. if you stay focused and understand the market better, your efforts will not fail you.
Ways to become a successful trader after your first failure on the market:
As a trader , it is very important to know that you are the sole cause of your failures. In other wards, your first failure on the market was all your fault. The market has nothing to do with your failures or losses.
It is the actions you take, the decisions you make and the way you interpret the information available in the market that cause your losses/failure.
If i am not to beat a round the bush, to become a successful trader, you must watch your actions, decisions and the way you perceive market information. How?
Trade what you see
Trading forex is not all about hoping or wondering whether your next trade is going to work. You only need a set of variables to define your trading edge. Your set of variables reflect your trading strategy. These variables tell you;
- what to trade
- when and where to take trade
- where to put your stop loss and target
- when not to take a trade
- when to cut your losses on a failed trade
Once you combine these variables, you will get a pattern. These variables set standards and guideline for you to trade.
You should there fore act only when you see them on the market. This way, you will avoid making errors and committing mistakes.
Align yourself with what the market is telling you not what you think should happen.
Know that Anything can happen in the market;
The forex market comprises of different traders across the globe but all share a common goal. That is to make money from the market. With out these traders, the market seizes to exit. Traders make prices move up when they buy. Down when they sell or side ways when not sure whether to buy or sell. Your individual decision literally has no effect on the market that has a trillion participants.
Every time you make a decision to take a trade in the market, know that there is some else who is doing the same or exiting a trade which is most likely to affect your decision. This means, it may take just one trader to make your trade go against your prediction.
However, once you enter the market knowing that anything can happen, then whatever results you get will not surprise you. You will trade not expecting the market to do anything for you.
In this case, you will trade objectively with your risk management in place.
Stick to your Trading Rules and Risk Management;
The sooner you start following your trading rules, the faster you see money add up to your account. Your trading rules tell you;
- how much to risk per trade?
- when to cut losses on a failing trade?
- where to set your stop loss and profit target?
- when and where to take trade?
- your position size
- how many trades you should hold at the same time?
- How much are you will to risk?
Set rules that match your personality and the kind of trader you are. After you have done that, make an effort to follow them.
You know it’s one thing to make rules and another to follow them. There are so many traders who have set rules but never followed them. write them down.
Read your trading rules every time you trade and review them at the end of your trading day. Assess yourself every after trading and see if you actually followed your trading rules. It will also help you to know the performance of your strategy.
In the same way, stick to your risk management rules. Do it repeatedly every time you trade, assess yourself until it is ingrained on your brain/psychology. With your desire and determination, you will become a successful trader.
Good luck on your trading journey..