If you’re losing with currency exchange, you almost certainly wish to have a foreign exchange trading course that may turn those losses into profits. Then for many of us, we are not that perfect trader in the 1st place. So a certain amount of losses must be accepted. It isn’t a question of getting rid of the losses, but of reducing them so that they come out to less than the profits.
To do that, it’s very important to discover how to lose successfully : in other words, to handle the inescapable losses in the most effective way. Then go on.
There is no need to research it to death at this time. You can look at all of your trading at the end of the week or month and determine whether any patterns are developing. But apart from that there’s no point in getting strung out about a loss. It has happened and that is it. Easier said than done, I know. But you can cut back your foreboding about losses by knowing your system extraordinarily completely. You’ll have seen that happening in back tests, if your back tests were thorough.
From those back test results you should be able to ready a calculation of the drawdown of your system. This is the most that you would expect to lose in a bad run. It’s the lowest point that your funds would reach between two highs, subtracted from the high. Before the bad run, let’s say that the highest spot the account balance would have reached was 1000 points. Then it slowly started to recover, and made it back up to 1000. The drawdown here is the difference between 1000 and 650, i.e. 350 or 35%.
