The traders make money, true, a large amount but that does not mean that they make money without facing any losses. Do you know about the Forex drawdown? Actually, none of the traders want the Forex drawdown but it is inevitable in Forex. Have you ever come across such situation? If you have not or even if you have, it is good to learn about it. If you have the misconception as that the Forex market is totally against you and you cannot get out of the drawdown then this is the RIGHT to understand the reality. You might face worse cases in Forex but never give on Forex market. There are ways to overcome the drawdown let us have a look at it.
The losses are a fact in Forex
The Forex industry is spoilt in many ways, not because of the Industry but because of the wrong information from several websites. There are many articles which say that “you can make large profits” but those articles never speak about the losses associated so people who are new to the market are led in the wrong direction. The want-to-be professional traders have this unrealistic idea in their mind. The Forex market losses are inevitable so you cannot avoid it but you can face it. If you overtrade, take up huge risks more than you could bear then it’s obvious you will face larger losses, which will actually lead you down the road of “drawdown”.
The volatility is important too
The Forex market is highly volatile but there are times when the market is in low volatility. When the Forex market is in such situation the price will not move much, but the market will be highly changeable. You may find a good trade setup and you may take up the trade but the price will not follow. In such period many traders face huge losses and many traders are trapped in such situation. They start looking for the next best Holy Grail. If the traders are not aware of the risk management when the marker is in low volatility it’ll make them lose the larger amount of money. During drawdown, you should follow the money management and risk management strategies to bring back your account.
When you lose, lose less
As traders, you should have the knowledge to keep your losses less. In order to keep your losses less, you should risk less. Before you trade the market make sure to analyze the market condition if so you will be able to target winning traders and reduce the losing trades.
Summary: even if you are good at trading and even if you a professional trader losses are inevitable. But do not panic, you can trade against the losses. So, how can you trade against losses? Actually, you can’t trade against the losses but you can minimize the losses and also, you can avoid the drawdown. But then even if you are facing a drawdown situation and even if you are looking at the huge lost trade do not worry you can bring back your account. You have to manage the risks and the money to build up a good portfolio.