Is it possible to trade Forex without drawdowns and losses?
Anyone who has been trading on the Forex market for more than a few months knows that drawdowns and deposit losses .
Drawdowns ruin a trader's mood, while complete deposit losses force them to start all over again.
Many simply can't imagine trading without these two events, not even imagining how easy it is to start trading without major losses.
These losses not only cause depression but also become the main reason for making further mistakes.
In fact, if you discount force majeure, minimizing losses is quite simple. The key is to follow simple rules and moderate your appetites a little.
• Always close trades if you have suffered more than a 10% loss. Don't move stops and don't expect miracles.
• Try not to leave open orders on holidays and weekends. After a price gap occurs, even a stop loss won't save you.
• Choose leverage so that a loss of a few pips doesn't leave you broke. Consistent trading, even with a small profit, will always allow you to earn more than a risky strategy.
• Do not use advisors that use risky strategies, such as martingale .
• Stop after 3 unsuccessful trades. If something goes wrong, you should first find out the reason, rather than increase your losses.
• Stop loss is an essential part of trading.
In fact, only novice traders lose their deposits, since modern trading terminal tools allow you to avoid this phenomenon.
Combating drawdowns is much more difficult, because here you need to give up hope for super profits.
• You cannot trade without drawdowns using high leverage; you will have to choose between your stop loss being triggered on the slightest pullback or losing a large percentage of your deposit in the event of a reversal.
• Using hedging can be a good alternative to a stop loss, since in this case you will have a little more freedom in choosing leverage.
• Switching to a shorter time frame will allow you to change the stop parameters, thereby reducing the size of losses and thereby not turning them into a drawdown.
• Trade cryptocurrencies only on the shortest time intervals; this is precisely why the largest drawdowns have recently occurred. There is nothing worse than a long-term cryptocurrency , especially with the maximum available leverage.
The rules that reduce the likelihood of losing your deposit, outlined above, are also relevant here. To further reduce risks, try not to keep all your available funds in your account, but only those necessary to maintain trades.
It's safe to say that the main reason for significant losses is poor money management, or rather the lack thereof. Read more about money management in Forex at http://time-forex.com/praktika/risk-menedgment
