Forex trading in the UK has its fair share of risks, and one of these is the possibility of blowing up a forex account. This happens when you lose almost all of your money in your trading account. Regardless of how long a trader has been in the realm of forex trading, this is never a good thing. Even professional traders blow up an account once in a while.
Technically no trader is safe from the terrible possibility of losing money, so how can you prepare yourself when it happens to you? A blown account is something that you can’t technically prevent, but you can lessen the effect on your account when you attempt to try again. Here are a few useful pieces of advice you can follow in case this happens.
Take a break from forex trading
Regardless of how much you want to open a new account immediately and try to get back what you lost, you’re better off taking a break and accepting what happened. It’s quite difficult to accept defeat, but you’ll absolutely gain nothing from setting up a new account then and there. Doing so is just revenge trading, and you definitely want to steer clear of that mainly because you’ll act purely out of spite and disregard every logical practice in trading.
Instead, use this time away to calm yourself and slowly accept the situation. Part of the learning process is to learn the hard part, and you have to be ready whatever the outcome is.
Backtrack your steps and diagnose the problem
Once you’ve made peace with what happened, try to take a few steps back and find out what exactly went wrong. If you’ve been keeping a trading journal, this step will be easier to accomplish.
If you notice you have a knack for overtrading, you probably might want to slow down and make fewer trades a month. There’s no use in making more if you can’t manage all your trades well. In this case, quality is certainly better than quantity. Choosing which time frame to use is also an important aspect that new and professional traders should remember. The best time frame changes from person to person, and is highly dependent on a trader’s style and strategy.
Practice makes perfect
There is nothing wrong with practicing with a demo account if you want to try out new trading strategies. Sure, it lacks the thrill of a live account but this is certainly a better option than blowing up another one just because you are too eager.
Lots of trading platforms offering a risk-free simulation of trading are available online. You can choose from platforms with an unlimited demo account trading time to those offering multi-platform demo accounts to help you get started with forex trading in the UK. Professional traders trying out a different approach utilize this account, so there’s no harm in going back to the basics.
No trader wants to experience blowing up an account but sadly, it can happen to anyone. It doesn’t have to be a drastic blow to your career in forex trading though. There are a lot of ways on how to lessen the impact, and these are some of the most important steps you can take. Sure, it will be difficult to start all over, but it’s not entirely impossible. You just have to try again to succeed in the market.