How to Limit Forex Trading Loss

In Forex trading market, it is not possible that a trader make money with every transaction, they should not continually add funds to a losing trade in hoping of market turn. They should set a limit where they can bear loss. When a trade is going for loss, then after reaching that limit, trade should immediately be stopped. Generating stop limit is the best way to cut Forex trading losses.

Stop losses will also inform traders about the maximum trading losses. So, traders should set a loss limit in Forex trading to minimize the losses. Another way to cut the losses is set rule of fixed percentage. It is a common recommendation that adequate loss for a single trade is 2%.

It will really help traders to calculate trade and stop losses. Traders can place a stop loss between 0-2 percent of their capital. Following 2 percent rule can help traders to earn back after any trading loss in Forex trading market because people can follow this rule. This will also really help trader to cut and limit their losses.

In Forex trading, every trader can set this rule while trading. Traders can use a 6 percent rule to cut Forex trading losses. It is recommended for limit monthly losses. When equity of a trader’s account dips below 6 percent, they should stop trading. 6percent rule allows Forex traders to hold three positions with probable of 2 percent losses, or six positions with probable of 1 percent losses.

It is good to have a monthly limit in Forex trading. Traders can also follow a 6 percent rule to minimize the losses. Traders can easily follow these rules in terms of getting command on their losses. All Forex traders should limit their losses. It is preferable to limit losses rather investing.