In this post, I am going to answer a popular question among readers of my blog. Based on my own opinion, I believe that most new traders are always in the state of losing streak which means that you have consecutive losses one after the other.
One of the main reason is due to revenge trading which is to me the main culprit for most losses by new traders. Whenever you get a losing trade, you tend to want to enter another trade in the opposite direction almost immediately hoping you can make back the losses.
In the end, the price usually stopped you out again leading you to think that the market or broker is trying to trade against you. Trust me, the amount you trade can not affect the market and your broker is also not against you. It is really due to the volatile movement of the market that stopped you out.
I used to have such feeling when I am new to trading but when I open several different broker chart and check, it is the real movement of the market and not a fake movement caused by my broker.
Now that I have become a full time trader making a decent income from trading every single month since 2009. I believe that most of you guys want to know if I still get a losing streak as well.
I did a check with my trader friends and we do a compilation. Everyone of us do get into a losing streak once a in while. The average is 3 consecutive losses but at the end of the month, we are still profitable.
So what is the main reason behind this. It is due to our risk management and risk reward ratio per trade that allows us to make profits at the end of the month despite getting into a losing streak.
Below is a screenshot of one of my account
This account is still making 22% growth after 3 consecutive losses. If I have $40,000 in this account, I am making $8,800 so far with this account and it is still not end of the month yet. That is why I often ask student to allow their profit to grow so that you can get more profit every month.
First of all, take a look at the risk reward ratio. Can you see that all my win is 50 pips and above while my losses are always 25 pips. You can see that the risk reward ratio of my strategies are all above 1:2.3 which means that I can withstand 2.3 losses for every win.
Secondly, you take a look at the percentage growth or loss. You can see that the first winning trade made me 14.94% growth while the 3 consecutive losses only lost 6% at most. This is due to lot size management.
For trades that are in the direction of the trend, we can go for more lots but for trades that are against the trend, we should go for lesser lot. This is because it is always tougher to trade against the trend then with it.
In addition, I always have the habit of pulling the stop loss to breakeven when the price has moved certain pips in my favor and that is why you see 2 trades with 0 loss and profit.
Thirdly, I want to tell you guys that you have to believe in the strategy that you have learned from me. Even after 3 consecutive losses, if you stick to the plan and trade accordingly, you will get the 3 consecutive wins as well. If you start to doubt the strategies, then you will not gain the 3 winning trades.
All the strategies that I teach in my course are reliable and working strategies. So I will urge all students to make sure that you practice them on a demo so that you can perfect your execution skills.
This is your ticket to lifetime income without having to put your life in the hand of your boss.
No matter how long you take to practice until you are able to have 2 consecutive months of profits in your demo account. The time spent is going to change your life forever.
For those of you who had took other courses from other people who are really good. You should also do the same thing. You must make sure that you practice them on a demo account until you are able to execute the strategies properly.
There is no short cut to trading success but it is definitely possible to achieve it.
All my full time trading buddies do have losing streak in their trading but it is the trust that they have put in their own strategies that they eventually emerged profitable at the end of the month.
My advice for all of you who are reading this post is to be realistic toward forex trading as it is a very good way of making money from home but it is not a get rich quick scheme that most advertisement made it to be.