Good day forex trading koalas.
Welcome to another article in the Forex Mistakes Series.
Do remember always that these mistakes can cost you your currency trading margin accounts and hence we must strive to avoid these forex mistakes.
Have you ever felt that your losing forex trade is about to turn it’s direction? In view of this, did you ever move your stop loss limit in hope that the forex trade will turn the opposite direction? Now how many times did the trade position turned into a profit?
Often many forex traders break their trading system rules and move their stop loss limit in a desperate bid to prevent the trade position from being closed. Before doing so, we must always ask ourselves these questions :
- Will doing so break the critical proper money management rule of maximum risk?
- Will doing so guarantee that the losing trade will turn into a winning trade?
- Will doing so increase the emotional attachment and hence result in further moving the stop loss limit?
Looking at the example above, I have often seen forex traders suffered similar fates. They move their stop loss limit until their margin account could no longer sustain the loss as they cannot accept the fact that their analysis was wrong. Yes. Failure to maintain trading discipline caused them to suffer a margin call.
While it is possible to make money in forex, expecting to do so in a short period of time is not realistic. If you analysis is wrong and your trade position is losing, accept the fact and reevaluation the situation. If you are having proper money management, the 2% loss will probably not cripple your margin account. Always ask yourself this, is it better to lose 2% of your margin account or risk losing all due to a margin call?
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