When to close profitable position

It is a question that every trader had had in mind and it is difficult to act when the time comes. You smile when the market goes in your direction and your greed does not alllow you stop the deal. And then the market start going back and you think - it is ok, I am still winning a lot. But the market goes on in the opposite direction and your thoughts turn into 'should i stop it when I have at least something'. But you can't put up with the defeat because you was about to earn a lot a moment ago. Then, like a nightmare, the winning deal become losing deal and your fear of losing a lot makes you stop the deal. It is very common scenario. 

So, when to stop the deal? You should know the answer before jumping into position. Think of some real target level and keep the scenario above in mind. Don't regret if you could get more of the deal.

Right expectations

Before jumping into the forex world, you need to set up right expections in your mind. Not lying to yourself is just as important as trading well. Even if you trade well, you may end up losing everything.

Forex market can offer you a lot and because of it, traders tend to expect more than they should. The most of the time the market is unpredictable making illogical movements and doing the opposite of the news. The trader has to know that the exact time for entering a trade is a impossible to be catched.

A trader must learn patience and to have less expectations and think more about a trader who has a lot to study than the money he has to earn. Traders, who think only about the money, leave the market very soon.

The starter capital

I doubt that there is a trader who hadn't asked himself the question- what should my starter capital be? Some think that you can't do anything if you play small which I highly doubt. Others are so afraid of losing money which does not allow them to trade properly. If you are serious about trading , spending money on it is something unavoidable. And then is the real deal. It is a whole new level because you have something to lose. But before you invest real cash, I strongly advise you to learn a lot and practice in demo trading.

If you ask other traders, they will probably give you different answers. My opinion is that a new trader should trade money that he can afford to lose. And if he trade big, he would be ready the consequences of losing it.

How do you handle your loses?

I would like to ask the readers of my blog the question - how do you handle your loses? The easiest way is to leave a comment below the post. I think that it is interesting topic. We can share valuable experience and learn from each other. Everybody has loses and how to properly handle them is an important aspect.

My observations are that some of the traders stop trading for short period of time, maybe to avoid the "revenge" deals. Other start thinking what's went wrong and spent time on analyzing which is a good thing but it is not working for me. To be honest, I can't understand what's went wrong right away, usually I need to gain more experiece. Another group just go outside and have a drink, which I highly recommend. You already know how do I handle my loses, so what's your way?

The biggest problem of the trader

I know a lot of traders since forex become my hobby. Some of them quitted a long time ago, some of them are still on the market but there is one mistake that they share - overtrading. It is like a curse for traders. Perhaps unavoidable. Don't get me wrong, I am not an exception. I think that this is the biggest problem for all traders.

In other words, what overtrading is that you make more deals than you should. This is happening when a trader set goals for a period of time that that he just can't achieve and he is making deal after deals which often leads to the end of his forex career.

The solution - just do not set any goals. Lean to be patience and don't push your luck. Enter the market when you have a clue. You won't improve with more meaningless deals and you won't become millionaire in no time.

Interesting idea

Again I will share with you my impression from forums.

We all know that most of the people, who become traders, do their debut through demo account. They start off with huge amount of money and in most cases they managed to double their capital. What they think is like 'that was surprisingly easy, I will give it a try with real money'. Perhaps all traders have followed this path.

So, what got my impression was one topic with name like  'can I open demo account with 100$'. The question that comes in your mind now is 'will he be successful with that amount of money even in demo? ' I highly doubt it but I can't deny that fear of losing real money would be gone .Did anyone try out this action ?

Leave the demo account ?

The other thing I am concerned about is leaving the demo account. To be more specific I tell you that when I go through the forums I come across topics like 'when to leave the demo account and start real trading?, 'how much time do i have to spend on demo account', 'is demo account really useful' and so on. What those people failed to understand is that demo account is one perfect environment for testing strategies and ideas. The thing is that we as traders don't want to lose money and bad deals can be significantly reduced if we try out our systems in place where it is impossible to lose real cash. Simple as that but I am surprised by those people.

Short answer - don't leave your demo account. It comes in handy if you know how to use it.