Sooner or later, every trader comes to a point in his career where he has to face up to the most debilitating forex fear he will ever come across in his life. This is the fear of losing the whole account due to some unforeseeable circumstances. You will also have to deal with this fear because it is inevitable that you will develop it.
Unfortunately, the main reason why this fear is considered to be the most dangerous for forex traders is that it is virtually uncontrollable. It can not only sneak up on the trader but also end up being debilitating to a point where the trader freezes and either loses an opportunity or incurs heavy losses.
Even so, it is possible to deal with the fear of losing your whole account due to a single mistake. Here are a few things that you can implement that will make it easier for you.
Create and Follow a Plan
First and foremost, regardless of what emotion you are dealing with in the forex market, the best way to counter it is to create a trading plan and then stick to it like your life depends on it.
Your trading plan should be extremely comprehensive and should incorporate all aspects of currency trading including market analysis, entries, exits, special orders, risk management, money management, and even withdrawals.
Be Disciplined In The Market
Discipline is the single most crucial asset that any forex trader can have because succeeding in currency trading is not about brilliance or hard work but consistency.
Consistency is impossible to maintain on the foreign exchange unless you are disciplined enough to repeat the same action over and over again. Currency trading is supposed to be dull and boring because of consistency. If it is not then you must be doing something wrong.
Become Detached With The Money
All the emotions that you feel in the forex market are directed to your money. As long as you view your account as a repository of money, you will feel that it is threatened by the volatility of the market. The trick to becoming detached with your account and to approach it objectively is to stop seeing it as money and instead seeing it as points or runs.
Focus On Money Management Techniques
If you have put a safety net in place then you can even jump off a five floor building. In the forex market, your safety net is formed by a combination of money management techniques and risk management techniques. If you can diligently practise money management principles then your fear will gradually ebb away into oblivion.
Take Regular Breaks From The Market
Pressure causes stress which, in turn, hinders rational judgement. You will start feeling the pressure of the forex market if you are consistently glued to it in a bid to make more and more money. On the other hand, if you take regular breaks then you would get to relieve the tension caused by forex rates and come back rejuvenated.