How far can you go to make up your losses? Do you give a rest to your trading activity after losing you money or jump in the market right away to earn back your lost money?
how do you make up for losses?
- Thread starter vicjon1995
- Start date
- Watchers 17
This is a good question. Firstly, I don't think one should ever take positions with a view to earning back losses. Losses are an inevitable and integral part of trading in the same way as any business has overhead expenses in order to make a profit. The real issue is controlling the size of losses with respect to one's account size and profit targets. In other words loss management should be an upfront component of one's trading strategy.
In theory, every trade should be taken according to one's strategy rules. And every trade should be journalled and appraised against one's trading criteria. If losing trades are within the rules and limits then there is nothing to be concerned about. However there will be times when one hits a series of losses and that is the time to step back and analyse the cause. Have the market characteristics changed? is the strategy still optimal? are all trades meeting the criteria? and so on.
Make any necessary changes and continue.....
Thank you and yes this question was in regards to hitting a serious loss only 
. You’re right, stepping back is the best thing to do. If you don’t mind me asking, how long have you been trading . Only curious because I loved your answer
. You’re right, stepping back is the best thing to do. If you don’t mind me asking, how long have you been trading . Only curious because I loved your answer 
to get back into it after a loss I tend to reduce all my lot sizes across the board for a few weeks
Did you mean that you go back in the market right away but with smaller lot sizes or when you decide to go back in the market after a break ,you start with small trades?
Leaving losses as losses is a good idea when you have not lost all your savings in the forex market. LOL.
I think you shouldn't try to cover your losses - I mean, you shouldn't focus on getting back the money you lost. Analyse your trading process and see what you did wrong (if you did something wrong) - was your risk management on point, did you stick to the plan you made, etc. And if you find a mistake, make sure you don't make it again in the future.
Jumping back on the market immediately is a recipe for disaster - you might be upset because of the lost money which can cloud your judgement.
Jumping back on the market immediately is a recipe for disaster - you might be upset because of the lost money which can cloud your judgement.
Personally I have to take a step back and take a break when this happens to calm down. Otherwise I fall into the revenge trading pattern (risking more to try to regain the money that was lost). It’s better to try to de-stress for the rest of the day so that you can come back level headed.
Similar threads
