Dangerous moments of trading.
Surprisingly, exchange trading is not as difficult as they say, most traders trade successfully for some time, but then an
unpleasant event occurs that causes a noticeable drawdown of the deposit.
It is a common practice when the losses of one unsuccessful transaction easily cover a dozen successful ones, and sometimes lead to a complete loss of the deposit.
In order to reduce the risk of dangerous moments when trading Forex, it is better not to trade at all at these very moments.
When do drawdowns and deposit losses most often occur?
• During the release of news - it is at these moments that the price can make a leap by tens or even hundreds of points, in the best case this leads to the triggering of the stop loss, and in the worst case to the loss of the deposit if the stop loss value was not set .
Therefore, try not to open new transactions before the news release, but move the stop loss to the break-even zone for already opened ones.
• When transferring positions - especially if you transfer positions over weekends or holidays, the longer the break between trading days, the higher the likelihood of a gap , and there is simply no worse event than this in Forex.
After all, during a price gap, stops are not triggered, and if the gap occurs against your position, the order will close no earlier than the first available quote, this is stated in the terms and conditions of any broker.
Therefore, try not to leave positions on weekends and holidays, including pending orders.
• Advisors are the leaders in draining deposits; you place a deposit, go to bed, wake up, and only have a couple of dollars in your account.
A fairly familiar situation for many traders. To prevent this from happening, you should use advisors with mandatory placement of stop orders and limiting losses within one day.
In addition, it is advisable not to leave robots unattended for a long time. • Lunch time and the end of the working day - at this time the trend is not always amenable to technical analysis, false breakouts often occur, and accordingly false entry signals are given.
Therefore, it is advisable not to rush into opening new transactions at this time.
• Overlapping sessions - the first two hours of a session is just such a time, the previous session has not yet closed, and a new one has already begun, usually at these moments market volatility and the risk of sudden movements increase significantly.
This does not mean that you should completely abandon trading at these moments, but you need to increase your vigilance.
Preserving your earnings is the most important task, especially since taking into account the above does not require much effort from the trader, but can significantly reduce the risk of large losses.