[B]AVOID THE SNOWBALL EFFECT[/B]
If we are too emotional with the trading, a losing trade can often have a snowball effect, with the loss triggering a destructive impulsive mechanism that compels us to need to make the loss back right away. This will undoubtedly create the illusion of many set-ups that aren’t really there at all. Inevitably, a trader may force bad trade after bad trade until his/her account is entirely liquidated. This is why it is very important that a trader pause for a breath after a losing position and maybe even step aside until the clarity that had once inspired productive and profitable trading returns. Avoid the momentum building snowball of insurmountable losses and be sure to continue to trade with control.
[B]Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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