How to do the right thing and not lose your money.
First of all, you need to assess the possible risk and consider two scenarios:
– stay in the market
– close the loss
Try to approach this issue being calm to avoid making mistakes due to emotions. I will not stop posting that losses are part of trading process and a trader must understand this.
If you see that, according to your analytics, the probability of a market reversal is high and the risk of getting a loss is less than the chance of returning to the profit zone, then you have to hold the trade. But in this case, you need to clearly define the maximum loss that you are willing to accept and set a stop loss. It is (psychologically) difficult to do, but it is necessary.
Try to relax while waiting for a reversal and start thinking about a trading plan that will help you in the case of a stop loss. Actually, you will need it anyway.
If you understand that the market is confidently pulling you into unacceptable losses (according to your analytics), then close the trade as soon as possible. There is no doubt, because the time that you spend on useless worries is better spent on developing a further trading plan and on correcting mistakes.
The most correct scenario is to carry out a risk assessment and develop protocols of action before you enter the market. In this case, you will already have a clear plan of action that will allow you to act immediately, without wasting important time.
After you exit the market and close a problem trade, you need to do some self-analysis to find the mistake and try to reduce the probability of its recurrence.
Read my forum thread on this topic: https://www.forexfactory.com/thread/post/13777208
Trade wisely and always remember that profits require professionalism.
