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How to trade on Forex without losses in the longer term

Every newcomer would like to know how to trade on Forex without losses in order to earn much quickly and spend the rest of life in a pleasant bliss. No doubts, it is a laudable striving but absolutely unreal, so it is not worth building castles in the air, but it is better to accept the raw truth at once. Each expert will confirm: losses come as a part of trading and if you don’t come to terms with it, you can even not try yourself as a currency profiteer as such a mood won’t bring anything good with it.

At the same time, on the Internet one can meet plenty of gurus now, who teach the “break-even” trading on Forex or sell strategies and automatic advisors with 100% profit guarantee. Unfortunately, this is just another way to betray trustful simpletons, as an experienced trader will never give you any guarantees when working on the stock exchange, because the proper trading is a game of probabilities. Everything what a good financier can do, is to take a position on that side in time, where the profit seems to be more possible; after that you need to wait patiently how it all will come out. It’s easy to guess that such an approach requires particular knowledge and skills.

Those, who want to find out how to trade on Forex right, without losses in the longer term, need to keep in mind that they have to follow and integrated approach by building their success like a house, of small but important “bricks”.

 

What do the chances to win depend on?

As a first step, let’s count in brief, what components are necessary to gain profit from Forex.

1. A right attitude of mind;

2. A good and qualified trading strategy;

3. A reliable broker.

4. Proper finance management.

5. Discipline.

You can find a lot of useful materials about each of these points but within the frameworks of this article, we’ll confine ourselves to a small description of each of them in fact.

Mental preparing

Since you will not be able to trade on Forex without losses, you should put up with this idea before adding funds to a real account. Many people think that they’ve understood that losses are a part of trading, that’s why they will calmly look how the minus position is being closed by stop-loss. But when this moment really comes, putting up with the loss can be not easy at all! As a result, it often happens that the position where you had to fix, for example, 30 loss points, leads to the loss of the entire deposit.

Such situations come quite often and in traders’ jargon are named as “tugging of losses”. The prevalence of the mistake lies in the fact that one need to take a serious mental load on him. Not many people can calmly watch the market taking money from him; and it happens often, so the mind is forced sometimes take one punch after another. An average person is just not prepared for this, even though first he may think different.

For this reason, it is important to read the main works by Douglas, Steenbarger and other trading coaches who explain how the main psychological traps work and what one should do. A right applying of special techniques, concentration and awareness in the trading period will help eventually relieve mental pain from the need to accept the losses on Forex.

 

Choice of a trading strategy

There is a wrong belief that a good strategy is a cornerstone of the profitable trading. In fact, it is not so, as there are just no really bad trading systems. It is much more important to apply its algorithms and get to the bottom of particular moments of one’s behavior.

This is the very reason why experts say that the easier a trading strategy on Forex is, the more efficient it is. The problem lies in the fact that the majority of beginners don’t try to get an objective picture of the market, but limit themselves to the system algorithms. In this regard, we can hear very often how such poor excuses of date traders manage to open positions, for example, before a release of important statistics or close to the important levels, when it is just stupid to count on a good probability of getting profits. As a result, they don’t manage to trade on Forex without losses, but it is difficult for them to understand, why.

So, what can be recommended for such cases? First, a good trader is constantly in the development process. It is necessary to suck in new knowledge by improving oneself in various analysis methods. This may help you form a right view on the market on the basis of the integrated forecasting, which excludes the probability of entry with strong opposite factors at hand.

Secondly, in the process of testing the strategy on a demo account or history, you should make sure that there is a clear understanding of the way how to act in particular time periods. This means, a trader should foresee all moments beforehand, having made sure that when real trading, no situations will appear where doubts will conquer him. As a rule, such situation may appear when using any trading system so it is important to be ready for them. When ignoring this recommendation, it is likely that in the next emergency situation, a trader will just get confused without knowing how to act right. It is easy to guess, how much a delay when making a decision may cost you.

Choice of a reliable broker

When choosing a company that will provide you with intermediary services, you should focus on those which have already been successfully working on the market for a long time and gained wide popularity. Besides that, it is important to make sure that the chosen broker has got a transparent model of working without any conflict of interests with his clients. For the companies that provide their services to citizens of the Russian Federation and the CIS countries it is necessary to submit to the financial controller CROFR as well as to have a license from the Central Bank of Russia. But in fact, the last moment is now still in the making. Even the same Alpari hasn’t received a license yet, although, without any doubts it belongs to the number of the most reliable brokers along with FreshForex and Amarkets.

A high level of reliability is possessed by the companies registered on Cyprus, where the local controller requires from them to match the high European standards appearing primarily in the regular publication of reports, keeping the clients’ funds on separate accounts with obligatory insurance etc.

The comparison of trading conditions deserves a special attention: minimum deposit amount, the value of the leverage, spread, speed of order performing, various specials and bonuses. All this together may have a significant influence on the trading results; that is why it is important to make it clear and carry out a careful comparison analysis.

Proper finance management

Some strategies include in their conditions the description how to choose an optimal trading volume, but in the majority of cases, there are no recommendations about it. For this reason, the trader shall determine by himself, what deal risks are considered acceptable by him. Despite the obviousness of the fact how important it is to distribute funds, 99% of the beginners don’t pay enough attention to the money management.

As a result, in their wish to fight back they often exceed the risks, which follows to the quick and inexorable discharge of the deposit. Besides the increased risk to stay without money, the wrong risk management also causes a heavy mental discomfort because it is difficult to think clearly when a significant amount is at stake, and many things depend on loosing or winning with it.

This is the reason why it is necessary to study carefully the classical recommendations how to manage the capital and become friends with Forex calculator, which will make the potential losses in trading not significant in the comparison with the deposit.

 

Disciplined trading

Working as a trader, especially during a day, is considered one of the most difficult. Its tireless companions became physical and mental fatigue that influences strongly the flow of thinking processes. It is easy to guess which results the trading will lead to, if the mind is blurred and just can’t react in time, when making the right decisions regarding the provided information. So, the first thing where the discipline is needed, is building a thought-out schedule, which will allow to alternate periods of mental and nerve tension with the moments of rest.

Besides that, in order to trade on Forex without losses, it is necessary to follow the developed rules and algorithms of the trading strategy sticking one’s heels in it. This is the only way to guarantee success, and if something doesn’t work, and then a trader will easily notice the flow in the working system in order to fix it. But if you act impulsively letting the chaos into the thoughts and actions, it’ll be hard to determine why one cannot come to a decent level of profit.

Only by listening to the recommendations given above, you can understand how to trade on Forex without losses, steadily closing one month after another with profit!