How to recover from a bad trade
We have all been there. We made a bad decision, set a take profit limit too high or a stop loss limit too low and missed out on what felt like the trade that only comes around once in a blue moon. At the moment, you may feel as though you have made the biggest mistake of your life. What you need to remember at a moment like this is that there is always a way to bounce back. Your trading experience is not measured by the number of failures you have had, but by how many times you got up, dusted yourself off, and went back in there. Today, we are going to discuss what you can do after an unpleasant experience, and how to improve your chances the next time you set up a trade.
Take a Deep Breath
After a losing trade, you may feel tempted to get back in there and recover the losses you have acquired during that last round as soon as possible. While the temptation to try and rectify the damage immediately might be hard to control, this erratic behavior could result in even greater losses. The last thing you want to do is turn a $300 loss into a $1500 loss.
So, what can you do? The best thing you can do right then and there takes a deep breath and relax. As long as you have not lost your entire capital (or worse), there will always be a way to salvage your portfolio. In the meantime, all you can do is remind yourself that this trade is not the end of your online trading career.
Pro Tip: Always fund trade with an amount you can afford to lose. Losses will become less dramatic if you use smaller amounts.
Learn from Your Mistakes
After such an ordeal, you might want to just forget all about it, but leaving the past behind may not be in your best interest. An important part of recovering means not repeating the same mistake a second time. Once you have had time to calm down, go back to the trading platform and examine the trade in your activity log. Then you will need to figure out where you might have gone wrong.
Make sure that you ask yourself the following questions:
Did you overfund your trade?
Did you set appropriate Stop Loss and Take Profit limits? (Did you set any limits?)
Did you rush to hit the OK button on this trade?
Where did you get the information on which you based your trade? Was it a reliable source?
Contact Your Market Analyst
If you are not entirely sure of what might have gone wrong, sometimes the best solution is to talk to an expert. Your market analyst should be well acquainted with your trading history and portfolio, as well as the trends on the global market. Should one of your trades go sour and you find yourself at a loss as to how to proceed, we encourage you to contact your portfolio manager as soon as possible. At CMTrading, we strive to provide our clients with excellent trading conditions, be it our trading platforms or our 24/5 customer support.
You can contact us via email, phone call, inquiry form, or our live chat. Choose your preferred method here.
Go back to Your Blueprints
At this stage, you should have carefully examined your failed trade with the help of your market analyst or by yourself. You should have also answered at least three out of the four questions we listed in the Learn from Your Mistakes section. Now is the time to get back in there once you feel ready.
Sure, stepping onto the MT4 or any other trading platform might be intimidating, there is no way around it. Being a trader is all about taking calculated risks and going for what you want. Let your fears of failure control you or dictate your trading career will not help you reach your short or long term goals, whether they are trading related or not.
How can You do better Next Time?
Just like any other skill, your trading abilities are something you will need to refine over time. Becoming a trader will require both knowledge and dedication to your goals. If you are interested in learning from a professional, CM Trading is willing to offer you 1-on-1 training and trading sessions with a market analyst. Your dedicated analyst will introduce you to the MT4 and its various features and explain how to execute trades on the financial markets while avoiding unnecessary risks.