Avoid the huge Trading Mistakes of Not Taking Your Losses

Do you want to know more about how to avoid a huge trading mistake? Watch our latest video and learn to avoid the mistake of not taking your losses.

Huge Trading Mistakes – Avoid the mistake of not taking your losses

One of the quickest ways to lose your account is refusing to admit when you’re wrong. In trading, this is taking your losses. You set a stop loss for reason, when you recognize that your thesis is wrong, and that the market is moving against you. If that’s the case, there is no reason to wait to take your losses as the market will continue to work against you, only compounding the situation further. Because of this, it’s very likely that you will eventually get a margin call, which is the end of your trading. You cannot become a profitable trader if you do not have a trading account. It’s that simple.

Markets tend to trend for several years at a time, so this is why traders always say, “never trade against the trend.” However, that’s not to say that you won’t get the occasional pullback, or perhaps even an impulsive move in the other direction. That impulsive move in the other direction can wipe out your account if it goes on long enough. Or even worse, you may find that you are caught in a trend reversal, which is absolutely toxic if you do not admit that you were wrong and get out. I know of no worse way to trade than to simply wait for the market “to do the right thing.” The markets are littered with the corpses of traders who have tried to outsmart everyone else, and simply refuse to admit that they were wrong. Typically, this comes down to pride and greed. Eventually though, the pain becomes too real, and traders will take their loss, albeit at a much heavier cost than was necessary. By all means, if you are stop loss is about to be hit, let it. In the end, you must be in the game to make money.