Forex Trading - Losing Pips Instead Of Making Some!

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There are times when it seems the day has started on a wrong foot or, more precise, at the wrong pip! Some days you are in the 90% of traders that fail, realizing how easy it is to lose quite a number of pips when you should have done a complete opposite. After burying the lost pips in sorrow and tears, you find yourself back in the 10% of forex traders that struggle to profit. However, the fear takes over and you are too afraid to take the plunge at the next trade… and somehow it is always the trade that could have made your dreams come true!

There is a mysterious irony when the trades you decide to join take, for example, a compete reverse. This makes you entirely freak out, hesitate and miss the next possible entry. And here is the punch line – the missed trade immediately moves into profit, leaving you without even a slight change of getting back in at your entry price. The boat is gone and you are bruised and shocked.

Let’s consider a well-known Sod's Law, also referred to as Murphy’s Law – “If anything can go wrong, it will”. Many forex traders choose to ignore the powerful spell that Sod’s Law casts on the forex markets. If there is even 1% chance of something turning upside down, it will at least 54% of the time! Take this into consideration when calculating risk/reward ratio. Also, keep in mind that Sod’s Law moves in exponential way, meaning that if something might go wrong 3% of the time, in reality it will go wrong 2,4% of the time.

Here are some things you can blame of Sod’s Law instead of cursing forex broker:

Good trading entries from which you do not exit early lose 90% of the time.
Missed entries turn into big win very fast – 90% of the time.
Missed Entries turn out to be good entries!
Changing in price against you before the mouse click actually freezes the trade!

The key in forex trading to survive this vicious circle is to differentiate between a weak forex signal and a strong one, and of course avoid the weaker signals at all cost. Also, it might be a good time to reconsider the trading rules and strategies you follow religiously. If Sod’s law rules your trading territory, seems like you are under attack of low-probability events (similar to poker game) or today is not your lucky day.

Keep in mind, though, that we usually focus on the downswings and forget the upswings, which do occur after a string of bad trades. Trading the signals without hesitation and following the exit plan will eventually get you out of the woods to the other side.

Also, here is another law for you - bad luck comes continuously for three times. You might ignore it until it hits you three times in a row in one day! Whether it is a 2-hour traffic jam on the way to the job interview, a spilled coffee on our trousers right before the morning presentation, double-decker bus on the narrow corners or broken nose right before your first date with a top-model – we all have our share of bad luck. The way to del with bad luck pushes you either towards being a successful forex trader or downwards to unsuccessful wanna-be.

Financial and emotional stress, substantial money loss and a bunch of gray hair (or even boldness!) are the part of forex trading. Let me assure you that none of the forex millionaires had it easy and smooth! Maybe what really separates those lucky winners from the rest of us is not the luck, but the fact that these forex traders got straight back up even after the hardest kick ever.

My tip for today is to stop feeling sorry for yourself and start analyzing the trading mistakes made so far. Complaining about luck will only make you weaker and further away from cracking forex trading. At the end of the day, if it IS just bad luck, then heads will turn eventually, but if it is a flaw in your trading strategy, it won’t fix itself.

Life goes on and it is perfectly normal for difficult moments to happen. You should never give up trading just because things aren’t a clear sailing. Trade your way up to the top with positive attitude, persistence and tenacity. You are responsible for your own luck and day dreaming of “luckier you” is a waste of time. This is your time to trade with precision, focus and self-control. You know exactly what you are capable of making out of forex trading and don’t let anyone tell you otherwise.

To summarize, tomorrow is another day and the plan is to trade good signals and not exit good trades too early. No Hesitation, No Fear, No Excuses!