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Jack Francisco

If You Are Losing Money in Forex,what Will Do Next?

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If you are losing money in Forex, what will do next?

Do you think that people who lose need to rest for some to adjust my emotion, or go back trading to win back the money which have just lost there.

 

I wish to know your opinions here. :rofl:

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My guess is many will switch to loosing money in some other market......probably for the same reasons.

If you dont know the reasons then maybe that is what you should do next - work out why.

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You should definitely evaluate the trades you are taking. It could be that you are naively entering trades that you just do not have a chance of coming out ahead.

 

Trading forex, you pay a spread. The best I have seen is about 1.5 pips for the euro on a full lot which amounts to 30 usd in and out. So, if you are going to risk 10 pips to earn 20 and you have a 50/50 chance of winning, assuming 1 pip on average of slippage, you will net $10 USD per trade over the long run if you promise to not move your stop or target. You have a positive expectancy (not likely as much as you thought), however you also have a draw down associated with this trade. Can you survive the draw down to earn $10 usd a trade? It is easy to calculate but you have to answer this question before you take the trade.

 

If you increase the spread to 2 pips in the above example, your trade has an expectancy of $0. Higher than 2 pips and you are negative. So, yes, you can lose money on a 2 to 1 R:R with a 50/50 expectancy trade in forex which makes it very frustrating because at first glance it seems like if you did that trade all day, you would be rich.

 

Then if you are the type of trader that moves his stop when it goes against him and then moves his exit to break even (one of my favorite trader types, second only to the guy who "averages down"), you are sabotaging your ability to win. This is common. You change a trade from an estimated probability of winning to one that has a guaranteed probability of not winning. If you do that trade 1000 times, x percent of the time you will break even and y percent of the time you will lose. There is no win.

 

So, look at each trade you take like a game that you are going to play 1000 times and determine if it is worth your time and money to take the risk. When you take a trade, you are better off remaining committed to the trade than changing the trade once you are in if you are new and just learning to read order flow.

 

Eventually you will begin to understand the need to minimize your losses (not necessarily losers) and maximize your winners.

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...I wish to know your opinions here. :rofl:

 

This is a joke - right? You're not actually expecting traders to give you advice based on the information posted.

 

Hey - how about... Oh yeah go for those revenge trades. Get your money back right away after a loss. That always work well, doesn't it? Get your emotions really going then just start hitting buy and sell. Eventually you'll make it all back.

 

Of course, you don't expect an answer because you haven't been serious about posting sufficient information in order to provide an informed reply. Makes one wonder what the purpose of the post is?

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Trading forex, you pay a spread. The best I have seen is about 1.5 pips for the euro on a full lot which amounts to 30 usd in and out. So, if you are going to risk 10 pips to earn 20 and you have a 50/50 chance of winning, assuming 1 pip on average of slippage, you will net $10 USD per trade over the long run...

 

It does $15 usd in and out. Think a situation where the spread is 1.5 but the market does not move at all. Then you buy and immediately sell -> you lose the spread not spread x 2. Take into account also how the price is calculated is it middle price ([ask+buy]/2), bid, ask or what. But maybe you included 1.5 pip slippage additionaly to the spread giving you that $30...

 

IB spread is guite tight 0.5 pip + 0.4 pip round trip commission = 0.9 pip total

 

btw. In your 50/50 RR 2.0 scenario the expectancy is $5/trade (20 x 50% - 10 x 50%) in the case you enter and exit by the limit orders (no slippage or spread effect).

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It does $15 usd in and out. Think a situation where the spread is 1.5 but the market does not move at all. Then you buy and immediately sell -> you lose the spread not spread x 2. Take into account also how the price is calculated is it middle price ([ask+buy]/2), bid, ask or what. But maybe you included 1.5 pip slippage additionaly to the spread giving you that $30...

 

IB spread is guite tight 0.5 pip + 0.4 pip round trip commission = 0.9 pip total

 

btw. In your 50/50 RR 2.0 scenario the expectancy is $5/trade (20 x 50% - 10 x 50%) in the case you enter and exit by the limit orders (no slippage or spread effect).

 

Why not skip the spread bull and just trade the EC. I have found that to offer excellent risk - reward.

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If you are losing money in Forex, what will do next?

Do you think that people who lose need to rest for some to adjust my emotion, or go back trading to win back the money which have just lost there.

 

I wish to know your opinions here. :rofl:

 

either you can analyze your trades and find out what went wrong (and then try to fix it) or just give up and find another hobby...

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It does $15 usd in and out. Think a situation where the spread is 1.5 but the market does not move at all. Then you buy and immediately sell -> you lose the spread not spread x 2. Take into account also how the price is calculated is it middle price ([ask+buy]/2), bid, ask or what. But maybe you included 1.5 pip slippage additionaly to the spread giving you that $30...

 

IB spread is guite tight 0.5 pip + 0.4 pip round trip commission = 0.9 pip total

 

btw. In your 50/50 RR 2.0 scenario the expectancy is $5/trade (20 x 50% - 10 x 50%) in the case you enter and exit by the limit orders (no slippage or spread effect).

 

if the spread is 1.5 the market has to move up 11.5 for you to make 10 ticks and down 10 ticks to lose at least 10 ticks. So, you are correct. I made a mistake. My example is not accurate, but the message is the same.

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