if you can't take a small loss, you will be forced to take a big one
Traders what do you think about this statement? Been trading for 2 years now and i realized it's so true that cutting losses early is better. When i began trading, i always held on to losses emotionally till they grew and i still had to accept the big loss in the end. Please what is your experience? have you had instances where you refused to take a small loss & eventually had to take a bigger one?
anyone who has been trading the same strategy consistently for long enough will know when something is wrong with a newly opened trade and will close it immediately for a small loss.
There is also the concept of risk to reward where if you estimate to get $10 from a trade, there is no need to allow a loss to grow to near $10.
I took a trade last week and when price started going against me i quickly closed it for a $5 loss. After assessing the situation and waiting for some time, I took another trade and make $12 thus recouping the $5 i lost.
Very true, it has happened to me many times. I had to re-train my brain to understand that taking a small loss does not make me a bad trader.
I also agree, I mean i faced the same scenario today. I opened a short trade but when i saw price was going up instead, I quickly closed it for a small loss of $1.45. I went ahead to open a long trade and made around $19 profit.
I didn't delay and begin to hope that the short trade will somehow become profitable, I acted immediately and closed it.
when a trade is in loss most traders become hopeful instead of fearful, they keep hoping the tide will turn in their favor until its too late and they are forced to exit with a big loss.
Its just like when you place a frog in hot water and start boiling, it doesnt realize it is in danger until the water begins to boil but by then it will be too weak to jump out of the water
