How to avoid losing over a $1000 like I did last week

Yes! That title typifies what just happened to me friday on the Eur/Usd pair.  Sounds very funny, right?

The truth of the matter is that no matter how professional you think you are, you are always prone to losses when you break the golden rule of trading the currency market.

Find a trend and follow the trend. Sounds really ridiculous right?

How can one who claims to know a lot about forex trading be losing that type of amount?

Now do you also know that you can also make money trading counter trend?

One basic reason was this, when a market shows a kind of thrust the previous day on a particular currency pair then no matter the retracement for a bigger continuation move, don’t always expect retracement like it should normally move especially when all indication of the value of the fallen pair depicts fears for the teaming number of investors.

You see I was actually expecting a retracement of .5 0r .618 fib levels which should have held but due to the drop of the market it came to the .236  and consequently headed lower breaking below 300pips.

So what am I really getting at here?

Though we may expect what the market may do, we cannot really tell when such move may start and should be prepared in case of the unexpected. Always be over protective of your equity by taking protective stops to avoid losing more than is supposed incase of an unforseen and unexpected event. Do not be caught pants down when trading.

Now even if  I had decided to hedge the trade, probably the loss level would have been lower. This might be another case study for another day. Be prepared.

Thanks for reading