You Can easily Lessen your Losses with the Vital Tools in FOREX

You Can easily Lessen your Losses with the Vital Tools in FOREX
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December 4th, 2011patt6211Investing mistakes

If you want to have a strategy that can keep you in a winning side, then you should know the importance of stop-loss orders. You might just fail in trading if you are not using stop-losses. Your entire deposit becomes your stop-loss if you open position without stop-loss. Obviously, it’s just stupid to risk the entire deposit for the sake of only one trade.

But on the other way around, stop-losses could freak you out, and may end you up with large draw downs, if you cat several stop-losses in a single row. You might stop thinking in a rational way when you become depressed because you find yourself stuck in the middle of a large draw down. And after than you will begin with “adjusting” your strategy “on flying”, making the situation worst. That’s the downside of stop-loss orders.

Gladly, you could find another way of controlling your losses in FOREX. You do not have to use stop-losses, provided that you employ an alternative mechanism of limiting your losses. Exit a loosing position with a planned loss and do not wait at the point when “you’ve had enough” so that you are still good to go with anything.

There are individuals who are not setting stop-loss orders and will be closing the loose positions by time or on the next correction. But this method ended me up with larger loss than what I originally planned, so I realized that this approach will not really work well.

Finally, I discovered hedging, and it changed everything in my trader’s life. Majority of my current loosing positions can be close with no loss or even with a profit. Do want to ask me how? Well… Very simple… You may not set a stop-loss order, but you can set a hedging order in the opposite direction at the stop-loss target point.

If market moves against your open position, your hedging order opens a new position in the opposite direction fixing your losses.

You could wait till the market flats out before closing both positions in a way that the total loss will become zero.

If you want to know more information about how I exactly did it, you may click on the button below and watch my video tutorial.

Related Reading:

Investing Success: How To Conquer 30 Costly Mistakes & Multiply Your Wealth

Investment Mistakes Even Smart Investors Make and How to Avoid Them

The Little Book of Behavioral Investing: How not to be your own worst enemy (Little Books, Big Profits (UK))

The Billion Dollar Mistake: Learning the Art of Investing Through the Missteps of Legendary Investors

7 Biggest Mistakes Investors Make

Tags: losses, open position

8 responses to “You Can easily Lessen your Losses with the Vital Tools in FOREX”

Jane Gibson December 13th, 2011 at 17:31

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