Loosing money when trading forex is regrettably unavoidable.  No trader navigates the forex market without occasionally losing some money.  The volatility – the precariousness and instability – of the currency markets makes it very challenging to predict.  Therefor, you would have to sit by your computer 24/7 and watch every single change the market makes to avoid any losses.

Nevertheless, there are some crucial hints to prevent losing in forex markets.

  1. Know that trading forex is not possible without some level of loss
    Focus more effort on reducing losses rather than searching for a way to avoid them entirely, since this is not possible.  Don’t let a string of winning trades to make you take bigger risks, since the losses that eventually will hit you, will just hit harder.
  2. Don’t try to salvage a loosing position by pouring more money into it
    Some trades will ultimately go bad when trading forex and you have to accept this and concentrate on your next trade.  Don’t try to salvage the situation by putting more money on the line but in stead let the bad trade die.  Use the opportunity to re-examine what went wrong so that you can avoid it next time.
  3. Tell your broker to close losing positions
    Give your broker instructions to systematically close your losing positions on your behalf.  There is never a good reason to allow losses to put you in a deficit position.  Good brokers will make a margin call on your account that will put a stop to your losses to a pre-designated point.

    What is a margin call?
    This is a way to protect some of you account in the event of loosing a trade.  Trading forex with a $1,000 account, your margin might be set at $250.  $750 will then be on hand for trading, but if your losses for some reason reach $750, your position will automatically be closed. This way the $250 will remain in your account.  That way your account can never reach a negative which you ultimately will have to pay.

  4. Trading forex with caution
    Try to follow the market trends when you are inexperienced.  Beginner traders should never try to guess the upward or downward movements of prices.  Even experienced traders suffer losses when doing so.  Try to go with the flow and exit trading when the trend turns the other way.
  5. Never allow emotions to get involved
    Losses occur when trading forex, period..  There’s no point making any kind of loyalty commitment to a specific trade.  Trading forex is a volatile and fickle market.  Trades happen continuously.  What worked for you yesterday may not work today.  This is not a place for emotional trading; prey on the successes and turn your back on the failures.
  6. You won’t get rich overnight
    Forget about tales of minute millionaires.  To succeed with trading forex and minimize your unavoidable losses, conduct yourself as you would with a business.  Assume to be in business long term, don’t believe that you will make it big overnight. Regard the forex market as any other market, where money can be made, and act proficiently and sensibly. Rash decisions will cost you money just as in any other business.
  7. Accept full responsibility
    Unless you want to rely on the – sometimes dishonest – recommendation from strangers and possible sharks, learn what you need to do to minimize your losses in forex trading.  Learn from your trades – both the good and the bad ones.  This also means, however, taking 100% responsibility for when things go wrong, just as you may accept full credit for when you succeed.  Once you accept responsibility, you will not succumb to any kind of victim complex when the market doesn’t go your way.  Accept the failures and look onward.

Don’t get knocked out by losses.  They occur and that’s a certainty.  Learn from them, understand them and the sooner you move on, the sooner you will recoup your losses and make headway into gains.