Is it common for traders to hang on to their losing trades instead of cutting their losses and moving on? I’ve been guilty of doing this from time to time. Hoping the price will change direction and help minimize those losses.
Surely if you’ve set your trade up correctly it would trigger your stop loss and you move onto your next trade. You’re only holding on to losing trades if you haven’t set a stop loss aka gambling.
A stop-loss should be at a price level after which your TA tells you the trade is probably not going to work. If that level is not reached your trade is still good: if you can’t see what that level is you should not have opened the trade but if it’s already open, better get out and re-think your tactics.
Hmm, leaving a losing always come with pray to GOD that it reverses.
If you have a strategy that has good risk management attached to it, then your risk management will help you cut down your loses.
Have a stop loss all the time.
Making money is not important.
Always try to focus on making a good trade.
And remember any good trade can make money or lose money, and also any bad trade can make money.
Never think in money terms.
Stick to your plan.
yes it is very comon because everyone hope that every trade will be winning so they don’t want to admit that they lost the trade. In my opinion you just have to trade with amount of money you are comfortable with losing and make strategy that will clearly say when you cut loses
My friend Hal, who is a pro hedge fund owner, and who mainly FX trades GPB/USD, EUR/USD & USD/JPY often leaves losing trades open with a wide S/L, because his IA analysis follows these market movements, and it could take days to close at breakeven level or get taken out at the max…
IMO, as a retail trader I would never let losing trades run, but I would suggest any account size larger than $1,000 there is leeway to lower the leverage to allow widening a managable S/L risk exposure to a maximum 5% live trades.
Best of luck.
¨hope is not a strategy¨
I’ve done that. I think a lot of us have done it at one time or another.
I did and blow up my first account doing that, this is psychological problem and very common I think, right now I have a note that I have to read loudly before I started trading, DONT MOVE THE STOP LOSS & JUST CUT THE LOSS FFS is on the very top of my note.
I never said it is. I said it is what will happen if you leave a losing trade.
Check also my next line to see the rest of my response.
haha I was agreeing with you. The quote was meant as an addition to what you said.
Sorry for the misunderstanding.
Oops, my bad. I get what you mean now. Sorry.
Sometimes I switch to another trade keeping the losing trade remained the way it is provided I have better opportunity available for trading.
If you have good risk management, then it shouldn’t be a problem. As for me, I’ll jot it down in my journal and move on to next trade opportunities. Practising Stoicism helps me a lot.
I think this is a very important lesson. If you have set a Stop Loss, KEEP IT THERE! The only way it should move is towards Break-Even or locking in profits (If that’s part of your strategy). There have been many times I’ve been tempted to move my SL just a bit, since “this is just a minor swing down, it will correct right after”. But, I talk myself out of it by saying, “Well if it does go back up, you can look at re-entering the trade again, maybe from an even better entry point”.
The temptation to move the SL is real
As I set a stop loss, I try to finish a certain trade and then move on because I can’t take much pressure.
Umm, I think it’s better to set stop-loss levels instead of hoping the price direction will reverse. Accepting losses as part of the game is important, and manage our risk effectively.
It is quite common for a lot of traders to tend to leave the losing trades open. That’s a proverbial behavioral bias. You should not do that. You should let your winners run and cut your losers fast. But the trading psychology is a lot of times different than that. That’s why you always need to learn more and be open to new knowledge.
I have to think the reason so many traders are so anxious about their entry and exit tactics is because they are genuinely critical in the type of trades they take - trend reversals and congestion break-outs. With these approaches you get one really good chance to enter and one really good chance to exit - then the trade is over.
There are other kinds of trading.
I think keeping loosing trades vary how a trader perceives future of the trade, it is obvious that market cannot go against you always there will be a time when it will bounce back but again not in certain exotic pairs where you definitely know that there is no chance at all.
I think usually it happens for new traders where they let there fear of regret take over and than they desperately want to turn around the position and avoid losses as I said that it depends on the perception if you have enough capital to sustain and wait for that moment where market will start working in your favor you can still keep going.
Sometimes overconfidence or reluctance to admit mistakes also leads to this kind of behavior.
I think as other friends also mentioned that to overcome this problem , set a clear stop – loss levels and maintaining a realistic and objective view of the market and probability.
It was one of the things my mentor tried to make me understand when I blow 2 accounts.