How To Trade News Events: why traders hold on to losing position

Humans in general grow up being taught by their environment of the importance of always being right. Those who are right are envied as the winners in society and those who are wrong are cast aside as losers. A fear of being wrong and the need to always be right will hold you back in general, but will be deadly in your trading.

How Most People Associate Profitable Trades:

How Most People Associate Unprofitable Trades:

If you were really the trader - which system would you rather have (System 1 or System 2)?

Majority of traders will take the second system without a second thought, and on top of that will stick with it even if it hits a few losses that wipe out most or all of its gains. Although the successful trader will want to know a lot more about both these systems. Why? Because most of the successful systems take a lot of small losses and make their gains for the year on a few big winners.