Currency Day Trading – Losing Trades is Just Part of the Game

March 6, 2010 · Posted in Penny Stocks · Comment 

What we tend to forget as currency day traders is that losing some trades is just part of the game. There are no traders that only have profitable trades, it is impossible. It is all about the bigger picture. What do all your trades of that specific day ad up too. If on the end of the day there is a profit realised, then it was a successful day.

You have to accept this as fact and incorporate the losing trades into your system. And just go with the flow. Understanding this principle is vital to day trading, every successful day trader will tell you that its all part of it.

After you have accepted losing trades as a fact, then you are ready to incorporate them into your Forex day trading system. It is the next logical step, if you know you are going to have negative trades you wan’t the best possible outcome with the lowest loss percentage out of them. You have to learn to prepare for your losing trades and manage them. One of the ways to manage them is by always setting a “Stop Loss”.

A “Stop Loss” is nothing more than an insurance that your trade will close if it reaches a certain loss percentage. You do this by setting a “Stop loss” percentage into your platform before you buy or sell. Almost every brokers platform has this option build into their software. Use this option wisely cause it is vital to your forex day trading system.

I myself use a stop loss in between of 10 and 25%. Normally I do not have problems closing my trades myself, but some days you just wait too long. Fortunately then the platform closes the trade for you when the limit is reached. So this way the negative trade doesn’t become a disastrous one. This doesn’t mean that you have to leave it to the platform to close your negative trade. Remember you don’t have to wait, when you are sure it is a losing trade close it immediately yourself. The less loss percentage the better.

And this brings me to another way to manage your negative trades. If it is a losing trade get rid of it as fast as you can, if you are uncertain if you should close the trade just close it. Live to fight another “Trade”. So to conclude this article, accept some loss percentage in your trades and incorporate it into your Forex day trading system and it will help you to master currency day trading.

Author: Don Antonius
Article Source: EzineArticles.com
Provided by: Duty tariff

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