Weekly Trading Lesson: Making and Correcting Trading Mistakes

[DailyFx]

Occasionally (hopefully not more than once) we accidentally find ourselves on the wrong side of a trade. We meant to sell, but instead we bought. After the few seconds of panic, we are left with a decision. What do we do now?




Most professionals will tell you that whenever they find themselves in this position, they immediately close the trade and correct their error. Too many times a new trader will convince themselves that the trade may work out anyway if they stay in long enough. However, more often than not the loss just gets bigger and the trader just gets more frustrated. Now you find yourself losing when you should have been winning. If you immediately exit and reenter in the direction you originally meant to, you could quickly absorb that loss and start to profit. Do not hesitate in fixing these types of errors. If it costs you a little money, chalk it up to experience. But don’t let a mistake like this get out of hand or it could cost you a lot of money in losses and missed opportunities.