Tips to Avoid Losses Due to a Wrong Prediction

There are times when forecasts our analysis do not match reality, so our open position becomes a loss. But we are also not too afraid, because such conditions can be overcome.

Here are tips on Forex to avoid losses using some types of risk management:

1. Stop Loss

Proceeding from the word stop loss stops at the loss. In trading, stop loss mode means giving the server an order to close the position when the market moves against our expectations and the market is touched to an unacceptable level of error.

Tips to Avoid Losses Due to a Wrong Prediction_

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The proposal is to set the stop loss level around support or resistance.

2. Hedge / Lock

When our position is opposite the market, then our position is in loss, but still float as long as we need to close it. To avoid further losses we can secure the amount of losses by opening a new position in the direction of the market and unlike the first psosisi.Sehingga wherever the market will move, our losses will not grow larger.

The proposal is: close the second position to unlock insurance when the market converges.

3. Switch / delivery more

If the open position is now loss, seeing that the market is really strong to move against the first position then immediately close the first position and then open a new position in the direction of the market or the opposite direction with the first position closing.

The suggestion is: change the position only if the new trend starts or breaks.

4. Average

This is to continue to open a new position in the same direction with the initial position although the market is moving opposite, hoping that when the trend reversed the market despite moving only halfway, we can close all our positions and if Derata-Ratakan transactions then we avoided even loss Profit.

The tips are: Do the average when the market is in saturated condition.

Forex tips to eliminate losses that should be very useful if in practice in our trading.