Don’t Expect Perfect Entry and Exit Points
Many beginning traders get frustrated when they enter a trade and the trade starts losing money. This is a normal part of trading in the Forex market. In fact, since most brokers do not charge a commission, they make their money from the spread between the buy and sell prices. The price to buy is going to be slightly higher than the price to sell. This spread can range from just a couple of pips on the major pairs to several or even hundreds of pips on the more exotic pairs. Because of this spread, every trade is initially going to show a loss at the point of entry.
Do not get discouraged if your trade continues to lose money after the entry. Trading is volatile and will always have up and down movements during any trading day. We are not expecting when a trade is made, that we will get in at the most opportune time. The same holds true for when we exit. If anyone gets in or out of a trade at the best time, you can attribute that to luck.
The main thing that we want is that we are able to capture a chunk of the move that occurs. We may not get in at the best time or exit at the best time, but if we can get a good portion of the move we are looking for, then we end up with a profitable trade when all is said and done.
We also have to realize that there will be losing trades. That is life as a trader. The key in trading is that we end up making more money than we lose. We need to prevent losing trades from wiping out major portions of our account. If we lose three trades but keep our losses small, we may only need one successful trade to still generate an overall profit.
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