It is inevitable and unavoidable. Trading will involve losses. However, you can still lose more trades than you win and make money! Whilst it is necessary not to fear loss, you must always take the loss. Imagine. A trade goes against you. There is no obvious fundamental reason for that to have happened, but nonetheless, this is what happened. You had found your pair to trade. You had conviction about the trade. There is a central bank divergence and one currency is set to fall and the other to gain. You had set your entry-level and established your total risk by setting your stop. But now you are through two technical levels that could have held. You still have conviction about your trade, but the price is now approaching your stop.

Do you alter your stop?

No! Take the loss. You have set your risk. If you still like the look of the trade you can reassess and re-enter – but the key thing is that you do this as a separate trade. If you regularly alter your stop losses it will mess with your results and start up a whole range of other trading problems like over-leverage and revenge trading. In the long term, it is best to accept the loss in line with your risk management tolerance. If you find your stops being hit too frequently it might be that you need slightly wider stops.