Let’s face it: Forex trading is hard.
In fact, it’s probably the hardest thing you’ll ever do in your life.
On the surface, it seems really easy – just follow some signals or read some charts and start making money.
The emotional toll that comes from losing money on bad trades or from watching a profitable trade go back to zero or even worse, go into drawdown is like nothing you’ve ever experienced before.
So when is it time to quit forex trading, and how do you quit trading Forex?
Recognizing when to quit forex trading
There are a few telltale signs that suggest you should stop trading Forex and focus on something else.
You’re trading money you can’t afford to lose
The number one rule in Forex trading is not to trade money that you can’t afford to lose. Forex traders need to understand that losing money is part of the game, if and you will not be able to emotionally handle a loss if this month’s rent depends on it.
It’s really counterintuitive, I know, but the only way you can ever be a successful trader is if you’re willing to lose the money you’re trading with.
The solution to this problem is to start trading with a very small amount of money – $100 is enough. Many brokers let you open an account with even less, but you won’t be able to reasonably trade unless you have at least $100.
Think of the $100 as an investment into your education, and trade using the smallest lot size possible, risking just $1-2 per trade.
Forex trading is affecting your health
The emotional toll that Forex trading can take – especially if you experience a string of losses -can start taking a toll on your health, too.
You start staring at the screen, you stop eating well, you stop working out, all out of fear of missing your setups and the profits they can bring.
Worse of all, you actually lose the trades that you do catch!
At this point, you need to decide: can you get your health back on track? There’s no point sacrificing your health for money that you’re not really making yet.
Money can be made back, but lost health is very hard to recover.
If Forex is affecting your health, it’s time to consider quitting forex trading.
The solution to this is to prioritize your health. Learn to decrease your screen time, go to the gym, go for a walk, meditate, or whatever it is that you need to do.
You’ll find that the less time you spend on the charts, you’ll be a more profitable trader.
Forex trading is affecting your family life
Much like the way Forex can affect your health, it can also affect your family life. The appeal of the charts can draw you away from your significant other, your children, your parents, and your friends.
Professional traders treat trading like their job, not like their entire life.
If you’re unable to devote only a reasonable amount of time to Forex and you find yourself glued to the screen, it’s time to consider quitting or at least taking a break.
The solution to this is to remember that you’re trading so that you can spend more time with your family and friends!
You’re treating Forex trading like a casino
Trading the Forex market requires a trading strategy. It’s a game of probabilities at the end of the day, but without a strategy, you’re doomed to fail – you may as well go to a casino and try your luck at the slot machine.
Many traders fail because the Forex markets draws them in with the promise of riches, but once they start losing money, they start doubling down to try and recover their losses.
This is what gamblers do in a casino, and in order to succeed at trading and not blow your trading account, you must treat Forex like a full time job(in terms of dedication, not in terms of time).
A job or business requires a plan, time, and execution to succeed.
If you’re just entering trades willy-nilly, you’re gambling, and if you can’t control your impulses, it may be time to quit.
The solution to this is to develop a strong trading strategy and be very disciplined in your money management. It’s also important to maintain a trading journal so you can study what setups worked well for you.
Most importantly, focus on just 1-2 trades per day. Once you’re up(or down) for the day, walk away from the charts. The market will always move again tomorrow, as any experienced trader will tell you.
How to quit Forex trading
Just because you’ve realized that one of the problems above is happening to you doesn’t mean you have to quit trading cold turkey.
There’s a solution for each of those, and if you’re unable to reasonably achieve those solutions, you need to take a hard decision and consider quitting if that’s the best decision for your health, your family, and your finances.
Set a target and stick to it. If money is tight, promise yourself that if you lose X amount of money, then you’ll quit.
If it’s family time, promise yourself that if you’re unable to spend X amount of hours with your family every day or week, then you’ll quit.
Once you’ve decided to quit, just withdraw any remaining funds from your broker and email them asking to close out your account.
More: Forex trading dangers
Quit manual trading and exclusively trade algorithmically
If you’re trading money that you can afford to lose but are struggling with screen time or money management, consider pivoting to algorithmic trading instead of manual trading.
Algorithmic trading lets your edge play out over time and removes all emotion from your trading. Provided your strategy is sound, trading using good algorithms can generate steady returns over time.
Just be careful with algorithms, since many robots tend to go into deep drawdowns.
Most traders end up quitting Forex trading because of poor risk management and unrealistic expectations. They end up risking too much money in the hopes of getting rich quick and end up blowing their account.
The reality is that Forex trading is a business like any other that will take time and effort to produce a stable income.