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With the spread of the coronavirus pushing governments around the world to impose drastic protective measures, the consequences of current restrictions have probably impacted your finances.

Managing your personal finances during the coronavirus disruption isn’t easy, and you shouldn’t forget about the repercussions of COVID-19 on your investments, as they very possibly have experienced large price movements.

The most important thing to remember is to have healthy financial and trading habits. This starts by learning how to protect your trading capital and how to survive losses when trading.

The forex market is one of the best markets to trade, as it is one of the most liquid and active markets in the world. Technological advancements have allowed an increasing number of retail traders to participate in forex trading. Today, all that’s needed is a computer or phone, an Internet connection, and a broker.

While many traders lose money, studies have shown that a lack of preparation and control of the psychological aspects of forex trading are the main reasons for failure. So let’s have a look at the most important ways you can better manage your trading losses and be a profitable forex trader over the long-term.

Have a trading plan and stick to it

To be a successful trader, it’s important not to trade following your gut or intuition, but according to a specific trading plan you’ve worked on and back-tested.

The plan will reflect your entire investment strategy in detail – such as which trading set-ups to use, when to enter and exit the markets, and which money and risk management rules to follow to protect your capital.

Implement risk management rules and use available tools

If you’re losing more money than you’re making, then it’s time to review your trading plan. Review the risk management aspect to figure out what parts of your plan need tweaking. You can, for instance, follow a specific risk/return ratio while placing your stop-loss and take-profit order every time you open a trade.

There are also tools that help to protect the interest of traders. DealCancellation, for example, is a unique risk management tool developed by online broker easyMarkets. The tool allows traders to protect their investments for a small fee within 1, 3 or 6 hours of opening a position, subject to terms and conditions.

Accept your mistakes and the fact that you will sometimes lose money

Trading isn’t just about making profits. It’s about making more money on your winning trades than you lose on your losing trades. It’s important to realize that you cannot make only profitable trades. You will sometimes lose but that’s fine.

You need to accept these losses and your responsibility for these decisions. Do not blame external factors for your mistakes. Take responsibility for them. And be sure you learn from them, so you won’t repeat them.

Control your emotions

While the psychological aspect of trading is often underestimated, it plays a significant role in overall trading performance. This is because our emotions can impact the way you understand and analyze information.

Being mentally prepared to accept losses and to overcome large price movements will definitely help you avoid costly mistakes. If you always control your emotions, you’ll be the one in control.