A Revelation for the Eyes? Understanding the Essence of FX's Appeal ~ Why Is It Difficult to Recover Losses? ~ [Dr. Iida-chi]
Mr. Iidacchi Sensei's Profile
Former instructor at a prep school. He loves hot springs and holds a hot spring sommelier qualification, and is a professional FX trader. By using a method called “Close Price Trading,” he has cultivated many top traders, and his online study sessions attract participants from all over the country, from the elderly to young people. The chart analysis method that emphasizes the “close price” is popular among part-time traders as a trading approach that does not require focusing on the market 24 hours a day.
Blog：The Great Comeback from 100,000 yen! FX Trader Iidatchi BLOG
Twitter：https://twitter.com/iidatchi
※This article is a reprint/edit of an article from FX攻略.com July 2020 issue. Please note that the market information stated in the text may differ from current market conditions.
Trying to recover losses often leads to failure
Hello, this is Mr. Iidacchi. I explained previously the misconceptions about leverage. Many ordinary traders mistakenly think that trading with high leverage will cause funds to deplete faster than usual. In fact, I have seen many people who think trading with leverage is gambling or hold a negative view of leverage.
However, when operating 10,000 units, whether your capital is 1,000,000 yen or 100,000 yen, if you are down 100 pips, the loss is 10,000 yen in either case. Instead of judging danger without understanding, if you properly understand and manage risk, leverage becomes a very convenient mechanism.
Recently, many traders who have suffered large losses have attracted media and social media attention. It seems almost like suffering large losses has become some form of performance or act. And usually they recover well and then incur large losses again, making headlines.
Iidacchi Sensei has also watched broadcasts of people who suffered large losses. What troubled him was the remark, “Since I’ve earned this much, I can reclaim it.” Unfortunately, most people become unrecoverable after large losses and exit. Why does this happen?
