Traders in the foreign exchange market often discuss issues related to entry / exit points, stop loss levels, and profit. Indicators, trading systems, methods of determining their effectiveness do not stand aside either. But, with all this, no one talks about when it is time to stop .
It is important to realize that it is not at all necessary to trade constantly every day. The fact that Forex is open around the clock encourages traders to open a trading terminal during the day. Of course, everyone decides for himself how often and when to trade. Below we have described several situations in which it is better to stop.
- Loss of funds
It happens that a trader loses money, while the market position clearly shows that this trend will continue, but cannot stop. At the sight of losses, I want to immediately compensate them, no matter what. The trader continues to trade. At the same time, he believes that he now accurately understands the situation on the market. The trader seeks to return not only money, but also the lost sense of confidence. However, the reality is that it is very, very rarely possible to make up for losses in one session. It should be noted that with such a trade, the trader succumbs to emotions, ceases to control both himself and the situation. At the same time, he loses more and more funds.
Therefore, the best thing to do is to stop. You can take a break for an hour, a day, a week, or even a month. This time should be spent preparing for further activities.
- With strong emotions
Periods when mental balance is disturbed are quite dangerous for trading. After all, then the trader concentrates not on the market, but on his experiences and emotions. This is a situation where carelessness and absent-mindedness can lead to unforgivable mistakes and loss of money. It’s a shame that the market is a substance that does not have a soul and is incapable of showing sympathy. Therefore, if events have occurred in life that unsettled you, it is best to take a break and bring yourself back to normal.
- When making a profit
Some may find this advice rather odd. But stopping after a certain profit is made is a powerful addition to a trading plan. After all, it is not at all a fact that every trader is able to achieve the level of profit that he planned. Therefore, it is good to stop.
There are speculators on Forex who make big profits at the beginning of the week, but by the end of the week they suffer losses due to their rash decisions. This can lead to the fact that they will lose money constantly, despite a successful start of each week. Plus, profit is often perceived as easy money that you can afford to spend. This leads to unnecessary experimentation, akin to playing in a casino.
To avoid this, you need to analyze the dynamics of your account. It is helpful to establish how successful you are at the beginning or end of the week or day. This will help you optimize your work, organize it in such a way as to make a profit.
To be successful, follow a few simple rules.
- Stay alone with yourself before bidding.
- Assess your emotional state. If it leaves a lot to be desired, perhaps you should refrain from bidding.
- Create your trading plan and stay on top of it.
- Analyze the history of your transactions. Identify the time when your trading is especially successful and use this in your work.
In any business, it is important to know exactly your capabilities.
