In forex trading, a certain percentage of loss can be expected, no matter how small it is. However, we always strive to minimize these losses so that our account balance can grow positively.

Actually, in all kinds of businesses, including forex trading, losses is unavoidable and very much common. In forex trading particularly, a certain percentage of loss can be expected, no matter how small it is. However, we always strive to minimize these losses so that our account balance can grow positively. Okay, so here is some things that need to be noted so you can prevent fatal losses during trading.

Avoid trading losses

 

Don't Over Trade

Don't over trade and take care of your margin availability. A friend of mine, a trader, even suggested that aside of monitoring margin, the quantity of open positions should not be too many. As benchmark, for a scalper consider to open around ten positions, and for day trader to open more or less 2 positions; while for swing traders is even less than that.

 

Don't Over Confident

Confidence, particularly confident in one's own analysis, is a must. But over-confidence may turn to be boomerang. Frankly, I was once a victim of my own confidence; carelessly opening buy positions on every fibonacci levels where I was sure that will be resistance only to found out later that prices continue to go up and I got margin call again.

 

Don't Be Fixated On Technical

For all of you technicalist out there, it is okay for you to rely in your technical indicator or analysis, but it will be better if you are aware of news release schedules. Becoming a technical-based trader does not mean that you can ignore NFP time. Although you don't like market conditions that deviate from its technical, at least you will know when important news being released do you could secure the positions and temporarily avoid the market.

 

Don't Enter The Market Without Conviction

If you are not sure of market condition, or you think the market is unattaractive, then...don't enter it. Let's say the market is ranging, and you don't like ranging market, then don't push yourself to start trading; wait until breakout occurs.

 

Don't Forget Stop Loss

Many traders, especially novices, dislike stop loss because they think stop loss hasten losses instead of limit losses. I think, if stop loss is indeed hasten the arrival of losses, then it is not the stop loss's fault, but instead our fault in placing stop loss at the wrong place. Trade without stop loss is sometimes tempting because it is as if we never make wrong order, but once we are aware that we are wrong, it is usually when our balance have disappeared.

 

Don't Hesitate To Cut Loss

When we are aware that a certain position is in the wrong side of the market, don't hesitate to cut loss. If you are always doubting yourself and unwilling to cut loss, then see my previous advice: don't forget stop loss, so a trade is automatically closed after arriving at a certain losses.

 

Don't Stop Learning

Don't ever stop learning, be it learning from theories, learning from mistakes, and learning from experiences. Even other people's mistakes that you recognize in social networks or discussion forums can be a good source of knowledge. Be aware that there are significantly fatal mistakes that you definitely don't want to experience it first before preventing it; in this sense, other people's experiences are invaluable. Enjoy the process of learning, and believe that trading is fun!