Successful Forex Traders Know When to Walk Away

Of course, I’m referring to taking a brief hiatus, not walking away for good.

All successful Forex traders know when to walk away and take a break. Those who are truly passionate about trading Forex know how hard it can be sometimes to walk away from the market. Still, it’s necessary in order to become a successful trader.

Walking away can be especially difficult following a trade. This is because our emotions are running high and often get the best of us. But that’s exactly what makes walking away at this time so beneficial.

After a profitable trade

After a win, we’re feeling good about ourselves and our trading strategy. It feels like things are finally starting to click.

Walking away at this time can be tough. The natural tendency after a winning trade is to continue trading.

However, that’s precisely why you should walk away.

Taking a break after a win will allow your emotions to settle. After the win, you’re feeling excited and proud of yourself, and you have every right to be.

But as you may well know, pride and excitement can get you in a heap of trouble, and fast.

So the next time you have a winning trade, pat yourself on the back and then walk away. By the time you come back to your trading desk, your emotions will be under control and you’ll be ready to approach the market with a neutral mindset.

After a losing trade

What do you do immediately following a loss?

I can’t speak for you, but I know what I used to do. I would immediately start going through all my charts looking for a new setup with the intent of recovering what I just lost.

Whatever you do, don’t do this. It’s just your ego drawing you into one of the most common and costly traps in the Forex market.

If you’re doing this, it means your emotions are getting the best of you.

Instead of seeing a loss as a reason to hop back in the market, take it as a signal to look at what you could have done differently. Remember, it’s just feedback.

One reason the failure rate is so high in the Forex market is that traders haven’t learned to lose.

Your emotions will always try to outweigh your logic after a loss; it’s human nature. The key to becoming successful isn’t about eliminating emotions after a loss, it’s about channeling them in a way that will make you a better trader.

Top Forex traders know this and have learned how to control these emotions. The very first step in controlling your emotions involves walking away for a bit.

From experience

One thing I’ve found helpful after a trade is to close my trading platform until the day closes at 5 pm New York time.

This is when I do the bulk of my analysis anyway since I trade the daily time frame, so it makes sense to take a breather until then.

It’s a simple, yet incredibly helpful, way of controlling your emotions.