Whether it is stock, option, forex, or crypto trade, losing is part of the game. If you want to turn every trade into a winning trade, money management is key to success. In order to protect your winning trades, you must have strict money management rules to cut your losses and build your trading portfolio.
Let’s discuss in detail; How to never lose a trade?
It is impossible because every strategy has lost trade. However, you can minimize the number of losing trades in every strategy by following certain strategies. Get confirmation of your trades in different timeframes, follow technical indicators, trendlines, support, and resistance.
Logically it is impossible to never lose a trade. But there are many theories and strategies that claim zero loss. Practically, it proves to be just publicity gadgets and every trading strategy has some losing rate as well.
How To Never Lose A Trade: 10 Tips
Forex trading is both a game of winning and losing. You can’t guarantee zero loss even if you are an expert trader. Logically, no perfect trader with zero loss exists.
It is the volatility of the forex market that prone traders to both win and loses. Here I am not going to explain termed strategies to win, just pointing few notes to eliminate losing numbers.
These notes are collected from different strategies and are applicable to all:
1. Never Trade Without Confirmation
It is always losing to make entry without confirmation that your trade will go in profit or lose. However, nothing is confirmed in this volatile market of forex yet you can make a good prediction by following TA and Indicators. Always mark your entry point, TP, and SL position before actually opening the trade.
2. Use Different Time Frames To Open Position
Most of the traders rely on shorter time frames. They make quick entries by relying on short-term positions through 15-minute candles. This is likely to end in a quick dump and they lose a big sum.
So, check your entries through all time frames, 1day, 4hr, and 1hr. After this confirm your target according to your strategy and trading time. Even if you are a day trader or scalper it is good to check different time frame charts.
3. Do Technical Analysis
Technical analysis is the basics of trading knowledge. You can’t be a pro trader if you don’t have an excellent command of Technical analysis. Learn different patterns, draw levels, and trendlines. Never jump into trade ignorant. It’s not a game for those who know less.
Update your knowledge about the charts that your strategy requires and then go on to trade. Test your Technical analysis knowledge on a demo account. If you go on without testing your strategy and knowledge, the end would be horrible.
4. Never Skip Support & Resistance Level
It is very important to have deep insight into support and resistance levels. You should draw all major and minor levels. It will help you to confirm when to open position and when to put stop loss. Major Levels are good to trade in higher time frames. Minor levels are good for day traders.
5. Don’t rely on Too Many Indicators
Using too many indicators can confuse you. RSI is best to examine your positions for overbought, oversold, and market manipulation. RSI indicators are compatible with all strategies. You can easily go with it. It’s easy to predict overbought, oversold conditions, and market manipulation through it.
6. Do Fundamental Analysis
Many traders rely only on Technical analysis and less on fundamental analysis. News is an important indicator to predict price movement. Keep eye on financial and economic news of bigger markets to know the trend.
7. Never Trade On Monday Morning & Friday Nights
Many traders do the mistake of entering the market when it’s time to close or shift the transactions from one bank to other. Friday nights and Monday mornings are very risky to trade forex. When trading closes in New York Market, it’s time to stay away because of slippage, higher spread, and artificial price spikes
8. Use Stop Loss
Stop Loss is one thing that directly stops you from losing money. In case of high leverage, you need to set tight stop losses. For a low risk-reward ratio stop loss can be set below the 4% to 8% of the entry price. Professional traders never trade without confirmed Take profit and Stop Loss positions.
9. Trail Stop Loss If Needed
Some trades have the potential to grow in the future but stop-loss close to the entry-level might stop you from making a profit. You can trail stop loss if your trade is moving towards the first profit target. To manage risk well, it is important to trail stop loss at entry position if your trade is moving towards the first profit target.
10. Never Overtrade
Professional trades never open 5 trades a day. If you are a day trader or swing trader, never trade excessively. It can tempt you to d silly things in greed. If you want to keep your emotions under control never trade excessively.
Frequently Asked Questions
Is it possible to never lose a trade?
Never, zero losing trade strategy never exit. Even the most expert traders tend to lose. However, it is possible to lower the number of losing trades. If you don’t lose, you don’t learn. You may call it your silent teacher.
How do I stop losing trades?
If you want to stop losing trade, get confirmation of your profit. Make right entries, use stop loss, and trail the stop loss position to entry if the trade is growing. If it is losing, leave it before loses accumulates. But it’s wise to give your trades time to grow.
How do you trade without stopping losses?
It is obviously possible to trade without a stop loss if you are able to withstand its downsides. However, there are 4 techniques to trade without stop loss i.e, spread trading, use call option, time stop, and no leverage at all.
Why do I always lose my trades?
If you are losing in every trade, you need to move to the demo account again. It’s important to backtest your trading strategy and prove it OK in your favor. After this go with it in a real money account. Constant losing signifies that you need more practice.
Although it is impossible to have zero loss in forex yet you can make a good try to cut losses. All you need to know is money management, risk management, and control on trading psychology.
Being consistent on your trading plan will make you live to trade another day. Money in your account is worthful to keep you in the forex playground. Follow the tips mentioned in this post and save your wins and avoid your losses.