Many people cannot escape the "predestined fate" of "margin trading". It must be painful, with the loss of funds and a great blow to confidence. I can understand if you find a corner where no one knows and cry.
You are definitely not alone. You may have heard that 90% of Forex traders lose money in their first year of trading. No one knows the exact figures, but I personally think that this number is an underestimate, not an overestimate. I was also in the early days of trading and went through the same pain that almost any trader goes through.
Lack of discipline, random trading without a trading plan, lack of proper risk management and greed are the main causes of liquidation. The pain is all due to liquidation, but the reasons for liquidation can be varied.
Even the best traders have their lows, and they cannot avoid continued losses or liquidations, so there is no need to complain about yourself and think that you are the most unlucky person in the world.
The biggest blow to traders from a margin call is not the loss of funds. The sign of a person's complete collapse is the collapse of confidence. You can raise funds in various ways, but once you completely lose confidence, many people will completely leave the industry. If you plan to stop playing, this is also an option, do something else. If you still want to continue, based on my personal experience, I think the following four steps can help you regain your trading confidence and get back on track.
Step 1: Accept and face reality
The positive approach after a margin call is to accept and face it, and not to escape. Many people cannot face reality. After a margin call, they delete the trading software, swear never to trade again, and tell everyone that foreign exchange trading is gambling and traders are scammers. Some people immediately deny themselves after a margin call, thinking that they are not smart enough and are not suitable for foreign exchange trading. As mentioned above, the best traders will fall into a low period, and anyone can be liquidated for various reasons. Face and accept the reality of a margin call calmly, and regard it as an opportunity, an opportunity to learn, grow and improve yourself. Some people are crushed by pain, while others become stronger because of pain.
Step 2: Review
Now that you have accepted your failure, it is time to review and examine your trades. Ask yourself the most important question: "What did I do wrong?" The answers may be multiple and varied. If you keep a trading journal and record your trading details, it will be very useful at this time. From the trading journal, you will find many problems that you did not realize at the time. If you do not keep a trading journal, you can review your transactions by checking the "Account History" on the trading software, and then analyze them one by one by comparing them with the charts.
The most common mistakes you may make are: you may take too much risk, that is, trade with a large position, or stop loss is too large; sometimes the stop loss may be too small; you may short at an important support point, or go long at an important resistance point; you may trade before important economic data is released. In addition, you may simply lose money due to unexpected events, which can be ignored as bad luck. List your past mistakes and remind yourself before the next trade that I will avoid these mistakes this time. If you keep doing this, it will become a habit after continuous reinforcement and eventually become an instinctive reaction.
Step 3: Resume trading from the smallest volume
In real life, many people find it difficult to adapt to the sudden drop from a life of great wealth to the life of ordinary people. It is difficult to accept both in terms of quality of life and self-esteem, just like the kings and nobles in ancient times being demoted to ordinary people.
However, you don’t need to feel ashamed about this when trading. After a margin call, your confidence is hit and your funds are also lost, so it is necessary to reduce the trading volume. Of course, if you have so much money that you don’t care how many times your margin call happens, you can ignore this step.
Remember that the market can hurt you and everyone involved at any time. If you are trading with your hard-earned money, I strongly recommend that you reduce your trading volume when you resume trading after a blow-up. I recommend that traders who want to regain confidence after a blow-up trade with a smaller amount of money to trade in a cent account. Some platforms offer cent accounts, which allow trading in very small volumes, such as 0.001 lots or even 0.0001 lots, and you can trade with just a few dollars. The purpose of trading a cent account is to rebuild confidence, and the risk is minimal.
Final step: Resuming normal trading
After trading on the Cent account for a while, you can review your trading. If you have been able to make stable profits on the Cent account and feel that you have regained your confidence, then you can resume your normal trading volume. Remember to stick to your trading plan and avoid mistakes that will cause you to blow up your account.
If you plan to treat trading as a long-term career, don't give up easily. If you don't believe in yourself, it will be very difficult to make money in the market.
Actually
Just do it
Don't listen to my nonsense
