Friday

I lost money trading, how can I get it back?


A commonly known fact is that most forex and index fund traders fail. In fact, it is estimated that about 76% of traders lose money and end up quitting. 


Bitcoinbinaryoptionsreview.com found that many traders do better than that, but new traders still have a tough timing gaining ground in this market. To help you make it into that elusive 4% of winning traders, the following list shows you some of the most common reasons why traders lose money trading forex and even stock market.

Befriending the Market: The market is not something you beat, but something you understand and join when a trend is defined. At the same time, the market is something that can shake you out if you are trying to get too much from it with too little capital. Having the “beating the market” mindset often causes traders to trade too aggressively or go against trends, which is a sure recipe for disaster.

Little Investing Capital: A lot trader’s start out looking for a way to get out of debt or to make easy money. It is common for forex marketers to encourage you to trade large lot sizes and trade using high leverage to generate large returns on a small amount of initial capital.

You don’t have to start small, you must have some money to make some money, and it is possible for you to generate outstanding returns on limited capital in the short term. However, with only a small amount of capital and outsized risk because of too-high leverage, you will find yourself being emotional with each swing of the market’s ups and downs and jumping in and out and the worst times possible.

You can resolve this issue by never trading with a too-small amount of capital. This is a difficult problem to get around for someone that wants to start trading on a shoestring. $1,000 is a reasonable amount to start off with if you trade very small. Otherwise, you are just setting yourself up for potential disaster.

Manage Risk: Risk management is key to survival as a trader, just like it applies to real life. You can be a very skilled trader and still be wiped out by poor risk management. Your number one job is not to make a profit, but rather to protect what you have. As your capital gets depleted, your ability to make a profit is lost.

To counteract this threat and implement good risk management, place stop-loss orders and move them once you have a reasonable profit. Use lot sizes that are reasonable compared to your account capital. Most of all, if a trade no longer makes sense, get out of it.

Don’t Give in to Greed: Some traders feel that they need to squeeze every last pip out of a move in the market. Successful traders know there is money to be made in the forex markets every day. Trying to grab every last pip before a currency pair turns can cause you to hold positions too long and set you up to trading loss on the profitable trade that you are trading.

The solution seems obvious here, just don’t be greedy. It’s fine to shoot for a reasonable profit but there are plenty of pips to go around. Currencies continue to move every day so there is no need to get that last pip; the next opportunity is right around the corner.

Firm Trading Decisions: Sometimes you might find yourself suffering from trading remorse. This happens when a trade that you open isn’t immediately profitable and you start saying to yourself that you picked the wrong direction. Then you close your trade and reverse it, only to see the market go back in the initial direction that you chose.

In this case, you need to pick a direction and stick with it. All that switching back and forth will just make you continually lose little bits of your account at a time until your investing capital is depleted.

4 Ways to Recover Money Lost to Trading

1. Think about it: When you’re losing trade after another, and you’re nearing a margin call, perhaps it may do you some good if you think back for a minute. Thinking pertains to a few things:

Is trading really for you? Trading is challenging for the inexperienced retail investor, and even those with experience, still, crumble in defeat. Think about the traits required for an investor to trade successfully: a love for analytics and meticulosity — in addition to steady emotions, which is tackled later.

A knack for numbers is central to profitable trading because dealing in the financial markets predisposes you to prices and particular strategies that involve, in one way or another, a form of math. Simply clicking buy and sell market orders on your trading platform arbitrarily isn’t a smart way to approach trading and is a sure-fire way for you to fail.

Be Meticulous in timing trade entries and exits: If you haven’t laid out a plan for opening and closing trades, emotions will kick in and derail you from what was supposed to be a winning trading setup.

So, if you have no patience for planning, you better plan to quit; otherwise, it’s just not going to work out.

What assets are you trading: Lastly, perhaps the asset you’re trading is just not suited for you, or the time frame you’re using is a little too fast for your liking, or it could be that long term or long time investing might suit you best. Regardless of the reason, you should take plenty of time to contemplate, and once you’ve addressed all of your doubts, then it’s up to you to decide whether to continue trading or not.

2. Reassess: One question you must ask when you’ve lost consecutive trades is if you’re following your strategy religiously. Of course, your strategy should have rules that are designed for you to mechanically truncate bad trades or automatically cap off precise profit targets to prevent wild price swings.

If your strategy works fine in your back testing sessions, it’s possible that you may have failed to follow your rules to a tee in actual trading or your strategy could no longer be viable. Your job now is to make assessments.

Try going over your trading history and examine whether you can spot errors. If nothing seems to be off, then back test your strategy once more in recent data and record your results.

3. Get Informed: Some traders lose money in the market because they are too eager to start trading and too lazy to try learning. A glimpse of a quick profit from a demo account live trading excites them to put real money on the line.

If you’re serious about trading and you want to make a full-time or part-time career out of it, then absorbing as much information as you can is key to your trading survival.

There are a plethora of resources out there to help you gain a better trading perspective, and it’s up to you to allocate some time to learn about them.

4. Get hold of your emotions: Let’s accept the fact that there are some bad day trading, or trading isn’t for you if you don’t possess a machine-like temperament when things go south. The market will penalize you for your volatile emotions with huge losses. Also, your actions that aren’t justified by logical reasoning will eventually turn into regrets.

CONCLUSION: You can hire a verified recovery expert to help you recover money lost trading. Take charge of your personal finance with this informative blog.