Have you ever put a trade on, run at very acceptable paper gain and then ... You know the rest doesn't trigger queue, reverses and collapses down and runs a small loss. Now, many merchants have there, he or she decides to stay with it, such as parsing was clear due to the upper-right? Wrong, continues to slide back and slight loss now is as great as the profit that could have taken! Now, the trader goes into decline. Denial that is actually a loss of any sub conscious mind, rationalization and says the trader will come back this person holds!
This keeps falling and losses paper mount ever higher. Sooner or later the pain is just too great and close to a significant loss. By this time the hapless trader blaming the market administrators and everyone but him or herself. The final indignity is to monitor the market recover from this level ends outside to run again all the way back!
Most traders have experienced that or something similar from time to time-but if the trader has one simple rule all that pain could have been avoided. And the trivial. Always place a stop loss, and to do at the time of the opening of trade.
Twice in the last week, I have worked with a pair of new traders simply did not understand the importance of a stop loss order and then moving it to protect paper profit from an actual loss. Before he had met me, two had taken eye watering losses, but both now know how to use this simple rule to stay out of trouble.
Merchants money management is the subject of another show, but the simple practice of deciding on a level of maximum loss when a trade is blind optimism have many young traders. Successful traders know that a certain percentage of the business there will be losers, you never know which ones, and so they are always and setting a stop loss means they will never be eradicated.
Another trader I worked with had a similar problem, ever stopped taking professions outside. We analysed these professions and found the majority of locations showed good profit before reverse and stop taking the loss. We decided then to a rule for him, never will be a loss of profit. If a commercial was reversed by the profit, the Ombudsman closed the level of post and these small steps activate his account around from loss to profit in a few more simple rules ...
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