Have you ever noticed how prices seem to turn against you right after you make a trade? Or maybe you’ve experienced the frustration of seeing prices hit your stop loss only to rebound towards your original profit targets?
If that’s the case, you’re in good company! Almost every trader out there has been through this at one point or another. But when it keeps happening, it’s time to ask: is it really just bad luck, or is there something more at play here?
When you’ve followed your trading plan and done your due diligence but still find yourself losing trades, it’s tempting to think the market has it in for you. But does the market really have a vendetta against individual traders?
Keep in mind that price movements are driven by countless decisions made by traders everywhere – from giant financial institutions to individual retail investors – who operate independently of you. They might have access to information you don’t, or they might be making moves that don’t align with what’s visible on your charts. They certainly don’t care about your qualifications or the fancy indicators you employ, and they definitely aren’t aware that you staked your honeymoon budget on a currency’s dramatic rise or fall.
Simply put, the market isn’t out to get you. In this scenario, think of the market as a high-profile star like Mariah Carey, and you as an aspiring artist trying to get noticed. The truth is, she doesn’t even know you exist.
If the market isn’t to blame, then perhaps the issue lies closer to home. Quite often, losing on a trade stems from how it’s managed. Maybe you didn’t spot a critical catalyst due to a lack of preparation or focus, or perhaps you overlooked a signal that went against your trading bias. It could also be that the market conditions have shifted and your strategies haven’t adapted accordingly.
One thing’s for sure: the market rules supreme. As traders, it’s our responsibility to heed what it tells us and adjust our strategies accordingly.
So, what steps can you take if you’re sticking to your plan yet still finding yourself at a loss?
First, consider reducing your risk exposure. If there’s a mismatch between the market and your plan, ease up on leverage or position size while you reassess the situation.
Next, take time to re-evaluate the markets. If things aren’t unfolding as expected, step back and figure out what message the market is sending. Stay informed by reading the latest news, following forex blogs, or catching up on analysts’ insights to spot any missed fundamental influences. It might also help to analyze charts across multiple time frames to identify overlooked technical signals.
Lastly, it could be time to tweak your strategies. If you find you’re sticking to the same beliefs but they’re not working, reassess whether your stops are too tight or whether your indicators are still valid in the current trading climate. For instance, using a trend-based indicator in a sideways market won’t serve you well. Consider if market conditions are shifting faster than your trading time frame allows or if your profit targets are realistic given the asset’s typical volatility.
Ultimately, as traders rather than investors, our goal isn’t to be right all the time. It’s to capitalize on what the market offers. Opportunities abound, so arm yourself with thorough research, maintain a focused mindset, and be ready to execute with flexibility. That way, you stand a better chance of success in your future trades.
