How to Avoid Losses in the Forex Market

The major reason traders don’t win is they are so frightened of risk; they actually create it and lose. This doesn’t mean you should take unnecessary risks, or act in a rash and cavalier manner?

But to make big gains you have to take calculated risks when the time is right and a good trade presents itself.

You need to learn how to confront risk in a positive way, manage it, and enjoy the challenge If you don’t enjoy the challenge of risk, then you will lose.

We learn from The Zurich Axioms that:
1. “Worry is not a sickness but a sign of health…If you are not worried, you are not risking enough”.

Often you are told only to risk what you can afford to lose in investing – when you know you should risk more?

You then see the gains you could have made – but you didn’t have the conviction to go for the trade and then you were left wondering about what might have been?

2. “Always play for meaningful stakes..if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either”.

If you don’t risk much, you won’t gain much. If however you load up the high odd trades then you will increase your profitability.

If you have a sound Forex Trading strategy you have confidence in then the above tips are common sense and will increase your Forex trading profits.

The major mistake most Forex Traders make is they think that they can restrict the risk of Forex trading to minimal levels and still win this is simply not true.

If you try and restrict risk too much by placing stops too close, you will simply will be stopped out of position by normal market volatility. It may look like it’s less risky but its a guarantee you will lose – so it’s actually very risky!

Volatility and leverage creates both risk and opportunity in online currency trading, you need to accept this risk and then spot the trades that offer the best odds of success and go for them.

If you do, you will actually decrease your risk and increase your profits dramatically.

If of course you don’t like taking risks then you shouldn’t trade currencies as you will lose – guaranteed.