The forex industry is a big market, which can offer financial stability and help you to quit your day job. Many new traders are only aware of the fact of the potential for profit and not enough attention is paid to the risk associated with currencies or commodities trading. The number one reason why most traders fail to become successful is the practice of revenge trading and poor money management.
So what is Revenge Trading? Generally, revenge trading refers to poor trade execution after incurring a loss. This typically means you are not following your trading rules and practicing money management. This is when many traders declare war against the forex market in order to overcome their losses.
- Poor trade execution after a loss in order to recover your account balance.
- High volume trade execution regardless of your account size.
- Expecting unrealistic profit from a trade to mitigate your loss.
Have you ever executed a trade in aggression after incurring a series of losses in the market?
Are you the victim of revenge trading? If it’s a YES then the following tips will help you to overcome this severe problem. This type of activity is standing in front of your trading career success. Let’s look at some simple and effective rules to avoid revenge trading.
Review your trading strategy
It’s always good to review the trading strategy when a trade hits a stop loss. This interim period will create the unique space and allow you think rationally before you take your next trade.
Stay away from the chart
Different people have different trading mentalities. Sometimes it’s very hard for certain individuals to avoid over-trading. In these circumstances, the best way to save yourself is to move away from the chart for that day.
Limiting your leverage
This is very crucial when we think forex as a long term business and our first source of income. Limiting your leverage will restrict high volume trading in your account.
There is no doubt that Forex is a market with the enormous potentiality for a successful trader. To be successful trader one must be consistent and keep away from trading with emotion. This will significantly reduce the loss of a forex trader in the long run. The professional trader embraces losses as much as they enjoy their profitable trade. So, say no to revenge trading and open the door of your financial success.