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3 Simple Steps to Manage Losing Trades

Posted on 23rd March 2018
3 Simple Steps to Manage Losing Trades

Even though you may exercise the most planned trading strategy, the market could still take a turn against you, proving once again that loss is something you can never avoid while trading. The thought of losing your invested capital could be painful & unbearable. Even though losses cannot be avoided, you can minimize the impact it could cause on your career by following these 3 simple steps.

1. Act Before it’s Too Late:-

As a trader, you should be quick enough to take right decisions on the prospect of not losing money. Imagine that you have an open position with no stop loss in place. Chances are high that your trade can end up with a huge loss. Now, the best thing you can do is to close your position when you realize the fluctuations aren’t good or you can sit comfortably and watch how much more you could lose.

2. Acceptance Can Change the Course:-

Most of the traders feel reluctant and get carried away by the thought that their strategy could work against all odds. What they actually fail to see is the reality that they are already on the verge of losing. A wise trader would accept the fact that he is losing and follow evasive measures to avert the worst. If you let your pride take control of you & your career, you would be amidst loss and chaos in no time.

3. Calculate Your Total Risk Percentage:-

Before you attempt to make another bold move, please ensure you have your risk percentage calculated. Experts advise to keep the risk percentage below five percent. Knowing how much more you can lose can guide you to take the most orchestrated decisions. Make sure you have stop losses activated to ensure maximum possibilities to minimize loss.

The goal is to make sure that you lose less while your profits grow constantly. Trading is all about how calculative and efficient you are when it comes to managing loss. With these simple rules in place, you’ll be able to keep your losses small when the market tries to take a toll on you.

 
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