7 Ways to Avoid Forex Trading Losses: A GCG Asia Guide

The global foreign exchange market is a most significant financial industry. The opportunity to benefit from it empowers forex investors of all types, from newcomers discovering the capital sector to experienced experts with decades of trading expertise.

Most forex traders join the marketplace fast but soon leave after suffering failures and setbacks since entry to the market is pretty easy, with round-the-clock sessions, high leverage, and reasonably low expenses.

So GCG Asia in Malaysia takes a look at ways to help forex traders new to the game to minimise losses. GCG Asia’s consulted affiliates in Singapore, Indonesia, Cambodia and Japan to get insights and the result is these seven suggestions to assist prospective traders in minimizing losing funds and remaining in the competitive trading forex world.

Finish your Research

“Just because you can do a trade with a click of a button doesn’t mean you shouldn’t do your research. A trader’s effectiveness depends on their ability to learn about forex trading,” said GCG Asia Malaysia’s Lucy Chao.

While practical trading experiences provide the bulk of trading learning, a broker should study all there is to learn about international forex trading. 

“Follow the latest news for the economic and geopolitical aspects that influence a trader’s favored currencies,” said a member of GCG Asia’s Malaysia team.

According to GCG Asia Malaysia, research is a continuous endeavor since traders must be prepared to interact in altering market circumstances, laws, and global events.

A trading strategy systematic technique for evaluating and assessing assets, calculating the hazard level must be taken, and defining short-term and long-term investing objectives—is a part of this research process.

Locate a Legit Broker

Because the forex sector is less regulated than other industries, it’s easy to wind up falling into a forex scam with a dishonest forex broker, according to GCG Asia Malaysia’s Lucy Chao.

According to the latest news, scams are quite common in forex. So do your due diligence. Each nation has its own regulating agency with which reputable forex brokers must join.

Dealers should also study each broker’s account offering, covering leverage levels, fees and spreads, deposits, and bank funding and withdrawals rules, according to GCG Asia Malaysia’s Lucy Chao.

A knowledgeable customer service person must know and be ready to handle any queries you may have about the company’s offerings and standards is an added bonus and is usually a good sign. 

Keep your trading funds safe

While the goal of the forex market is to make money, it is also critical to understand how to be alert to stopping losses. 

“Satisfactory managing money methods are an essential component.  Many experienced dealers will admit that you can start trading at any rate and still earn money,” says GCG Asia Malaysia’s CEO Dinish.

According to GCG Asia Malaysia’s forex trading founder, the aspect of this is understanding when to absorb your failures and continue.

Always utilizing a defensive stopping loss technique that uses a stop-loss policy or a limitation order to preserve current profits or prevent future losses is an excellent approach to ensure that damages stay acceptable.

“Traders may also choose a minimum everyday loss amount beyond which all stocks will cancel, and no fresh trades will be made until the future market cycle,” according to GCG Asia Malaysia’s Lucy Chao.

While dealers should make preparations to minimize their losses, they should also take measures to preserve their gains. 

Managing money methods like trailing limits (a limit orders that may place at a percent distant from a safety’s present trading value) can help traders keep their profits while still allowing them to grow.

Make Use of a Demo Account

“Almost all trading networks come with a training account, often known as a replicated account or sample account,” says GCG Asia Malaysia’s Lucy Chao. 

The most significant advantage of a sample account is that it enables a dealer to improve their order-entry skills. Few things may be as devastating to a dealer’s account (and morale) as pressing the incorrect button while establishing or closing a position.  It’s very unusual for a novice trader to make the mistake of adding to a failing position rather than ending it.

According to GCG Asia Malaysia’s Lucy Chao, numerous order input mistakes may result in significant uninsured losing transactions. 

Performing trading errors is very frustrating, in addition to the financial consequences. It is said that repetition makes perfection.  Before putting actual cash on the table, practice!

Start small

Once a dealer has finished their research,  invested time on a sample account, has a trading strategy in place, they may begin trading with real cash at risk.

There is no way to replicate actual trading with practice trading accurately. As a result, while going live, it’s critical to start modestly.

As per GCG Asia Malaysia’s Lucy Chao’s recommendations, feelings, and emotions are factors that cannot be accounted for entirely and compensated for till the transaction is completed live.

Furthermore, a trading strategy that worked well in backtesting or sample trading may fail horribly when implemented in live exchange. 

Beginning small allows a trader to assess their trading strategy and feelings, as well as get more experience in executing accurate order entries—all without losing their complete trading account,” says GCG Asia Malaysia’s Lucy Chao.

Keep your charts tidy

It might be appealing for a trading strategy to use all of the fundamental analysis tools provided by the trading platform after they have opened an account. 

While most of these signals are well-suited to the forex markets, GCG Asia Malaysians news advises keeping analytical methods to a minimum for them to be successful. 

Multiples of the same kind of indicator, like two volatility signals or two oscillators, may become repetitive and even provide contradictory indications. It should resist at all costs.

GCG Asia Malaysia advises that analytical techniques that aren’t used regularly to enhance trading efficiency should be removed from the chart. 

Pay close attention to the general appearance of the workplace in contrast to the tools used on the chart.

The colors, fonts, and types of cost bars used should provide a chart that is easy to comprehend and read, allowing the dealer to respond more rapidly to changing market conditions.

Maintain accurate records

Keeping a trading diary is an efficient method to understand both failures and wins in the currency market.

According to GCG Asia Malaysia’s CEO Dinish, maintaining a record of dealing activities, including dates, tools, gains, failures, and, probably most importantly, the trader’s personal productivity and feelings, maybe extremely helpful to developing as an effective trader.

A trading diary, when examined regularly, offers valuable feedback that allows for learning. 

“Traders who do not maintain a trading diary or keep excellent records are more likely to repeat the same errors, reducing their prospects of becoming lucrative and effective traders,” says GCG Asia Malaysia’s Lucy Chao. 

Final Thoughts

A successful forex trade and profiting can be satisfying, but accomplishing that is very difficult. It can take a lot of time, according to GCG Asia Malaysia’s founder Dinish. 

As per GCG Asia Malaysia’s short survey from 2021 show that traders may increase their chances by conducting research, avoiding excessively positions, employing good money handling methods, and treating forex trading as a business. 

Visit Jom Kita Forex’s official website for more latest updates on all things forex trading in Asia!