Reduce loss in trades.
I wonder why some people keep their failed open positions for a long time after failure, by hope to see the price gets back! Waiting and going down in loss, bigger negative profit they gain! And there is a question: when did the trader find out that he made reverse trade? Why didn`t he close it right after he understood his fault. And this makes him higher loss, and after making the same mistake several times, he will lose all money!
But at least the failed trader can do one little important thing: denotation of take profit and stop loss.
And I think the Stop-loss is more important. Hope is the both human’s power and weakness points simultaneously. Hope has caused him to keep the bad position, and in more cases he closes it when an essential part of his balance is lost. Thus he must close bad position immediately after finding out about his wrong decision.
He even ignores his own warnings and just hopes for the reverse trend and the good situation. After a while he can`t accept more loss, he close it and loose.
Ignoring stop loss left him destitute!
You must not take a risk any more in your trade.
So think about stop loss point before taking a position.
