Asking traders about their losses due to minor accidental mistakes revealed that quite a lot of them lose hefty amounts of money. This would definitely qualify as a major failure. It is always difficult, both psychologically and economically, to recover from such failures. Exasperating the situation is that many traders don't know what to do when they fail seriously. Obviously, it would depend on how exactly you failed, so here are some standard failed-too-much situations you can find yourself in when trading Forex:
- Misplace a trade — you traded the wrong currency pair, you entered with 10 lots instead of 0.1, or you opened a "demo" trade in a live account? This is some serious trouble — you don't want to escalate and you want to cut it as short as possible. Luckily for you, this is easy to do — just close the trade and live with the loss. Things get scarier if you let the trade on for some time without realizing how you messed it up. This is the right time for analysis then. Look at the market. Is this trade something that can work out despite being a mistake? Is the perceived chance of recovery high enough to warrant the risk of losing even more? You have to be 100% sure in that if you decide to keep the abomination alive. Otherwise, just cut it and cope with the loss.
- Entering a trade without stop-loss and letting the losses pile up — probably, the most popular way beginners screw up in foreign exchange trading. There is nothing to do here — just close the trade and hope to recover the lost funds with more thought-out positions in the future.
- Going with a wrong broker — opening a live account at a broker without doing a proper research is one of the biggest mistakes Forex traders make. If you are among them, it is easy to find yourself unable to withdraw funds, to experience lots of connection and trading server issues, to get poor customer support service, or facing an outright scam when thieves run away with your hard-earned money. Try not to find yourself in this situation, but if you are already there, get out as soon as possible — don't accept any excuses or promises from the fraudsters — close all your trades, withdraw everything they've got, and write an appropriate review about them. If you are unable to withdraw, you should start working with authorities, your bank, and possible even the broker's bank as soon as possible. You can even try to charge back the deposit amount through your bank if you topped up your trading account with a credit card. And be careful not to fall for those "funds recovery" websites — you will just get scammed for more money.
- Falling for trading signals, MLM, paid courses, and so on — this isn't critical, but you don't need to spend money on worthless stuff. Focus on studying the free content available online and some highly recommended books, learn from practice accounts and by watching other people trade on YouTube. Wasting money on the industry of paid 'everything' in Forex isn't the brightest idea. Cancel your subscriptions, stop following free signals too (they won't make you a successful trader), and start getting your head on straight.
- Blowing your entire account — was it simply due to poor money management or just a really long streak of losses, losing all your trading funds is never fun. Of course, you traded only what you could afford to lose, so that's not a really big problem, is it? Anyway, what's lost is lost. You can start another trading account as soon as you have some funds for it and, more importantly, a trading plan that isn't subprime (and isn't based on revenge for the lost account).
That pretty much sums up the major failures many FX traders live through during different stages of their careers. Knowing how to deal with them and how to proceed further is useful even if you believe that you won't ever find yourself in such a situation. Also, it is important to know when to stop — perhaps, Forex trading is not for you. If your Forex trading career is made of failures, maybe you should try yourself in something else or just take a few years break from trading. And if your trading is more or less successful, you just need to find a way to deal with failures when they occur.
If there is something you want to tell other traders about committing serious mistakes in Forex trading, please feel free to do so on our forum.
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