Cutting your losses fast and letting your winners run is a common phrase we hear all the time. Yet applying this simple strategy to your trading can be harder than it seems.
The first thing is that many of us find it hard to admit when we are wrong. As kids we were disciplined and corrected whenever we made a mistake. Whether it be by parents, teachers or peers. We associate being wrong with an unpleasant experience, and therefore avoid it at all costs. We were never taught that being wrong is Ok. That the experience is a lesson and something to learn from in the future.