Losing Trades and How to Cope

It is always hard to deal with trading losses. Here are some simple trading rules that might help to calm nerves, to avoid further upset and so to keep us on path to pursue our goals:

1. It is all about capital preservation. Each trading losses should not exceed 5% of the total capital.
2. Set stop loss level to minimise trading errors.
3. Do not let winners turn into losers.
4. Use stop loss to protect profits.
5. Do not add on losers for cost averaging.
6. Stay sway or cut your losses when you become indecisive.
7. Rather wait and see when the market trend is not clear.
8. Trade when the market is active.
9. Do not enter because you are bored, likewise, do not exit because you are impatient.
10. Do not overtrade.
11. Do not simply alter your trading strategies if not for a sound reason.
12. Always remember that losing is part of the game.

Trade The News 01-06-07 (Non-Farm Payroll)

"There was an initial spike as people saw the headline figure (Non-Farm Payroll) but the dollar quickly fell back after they realised it hasn't really changed anything".

Soon after the news, my long EUR/USD position was immediately stopped out at 1.3427 for -11 pips due to the stronger than expected job report. I immediately reentered another long position at 1.3423 (don't ask me exactly why ... may be partly due to buying at dip, not giving up etc. ). I noticed that the PCE report was actually showing a tamer rate of inflation. My position was gaining quick on my 2nd entry and I was able to exit for +35 pips just 4 minutes later. Since then, I have been sitting on the side line.

EUR/USD 1-min chart

Trading update: I am very close to my account target of Level 6 after hitting level 5 on Tuesday.