So you have lost your trading account and now is in zero? Oh, man, I’m sorry, this have also happened to me several times …… !! But let’s be a little constructive and rather than lament the big loss let’s think why the account was ruined and what we should do and as evil of many is the consolation of fools, think that ruin Forex accounts is something quite common.
Perhaps you are tired of hearing that 90% of traders lose money in their first year of trading. I really do not know if this statistic is very accurate, but unfortunately for what I see, I tend to think that is true. I myself have had accounts that have practically fallen to zero: lack of discipline, not following the trading plan designed, etc. are usually the most common causes that lead to continuous losses that diminish and undermine trading accounts even to activate margin call.
But do not miss any illusions, I believe that even the most famous and respected traders have failed at some point and have reached the bottom to return to the market and be successful.
Step 1: Accept the reality
The first step on the road to return to trreaade after the loss of the capital account is acceptance. Actually there will be no choice but to accept the loss because no one will return the money, what I mean is to accept that you have been responsible, do not throw the ball out and blame others.
Some traders after losing an account are invaded by negativity and think that they will never be good enough to get benefits from trading consistently. Successful traders, by contrast, look beyound and understand that Forex trading involves risk and that while ruining an account is no good, it is a reality that can happen to any trader and a situation which may serve to learn and improve as a trader.
Step 2: Study the past
Now that you have accepted the situation in a positive and constructive way it is time to face the reality of what you have done to lose your valuable money. You will have to answer yourself the question “What have I done wrong?”. The answer to this question will be found in your trading diary (I assume you have one and you have had the discipline to write down the details of each transaction).
Analyzing your trading diary you can find the most common faults that lead to ruin: Did you risked too much on each trade? Did you make your trades according to your trading plan? You still think that the trading strategy that you followed is right for you? Look at your trading diary and see what you were doing to ruin your account to zero and think about what you could have done differently.
Step 3: Return to trading with demo accounts
For any trader the return to demo accounts can be frustrating, I know, it is like a direct attack on the ego. But we are not here to take care of our ego but our pocket. Practicing for greater security and confidence in our trades is not bad, so let the ego aside. In trading the ego is not our friend as the market will try to humiliate us on many occasions.
It is advisable to operate in the demo account for at least 6 months to retake confidence and strengthen your trading strategy.
Step 4: Open a live account again
After practicing on a demo account, when you feel you are ready to return to trade with real money, please contact a broker and open a new trading account with the amount of money you are willing to lose: remember that the trading capital is risk capital.
This time just be sure to follow your trading plan. You may not see the benefits in abundance, nobody sees. Trading is about to be consistent over time.
