One of my favourite trading mantras...
'I will place a protective stop without fail every time a trade triggers'
The reason is simple.
No one knows what markets are going to do from one day to the next.
And not the so-called financial expert you listen to on TV.
Ask any trader who is carrying a large loss, or who has taken a large loss in the past.
100% of the time they wish they had respected their original stop position.
Emotion makes most traders break their rules.
It takes discipline and courage to admit that a trade hasn't worked and then a little something else to sell at a loss.
Whereas, all you need to hold onto a loser is hope. Hope that one day it will turn for the better.
Here's the thing; it's okay to be wrong.
The mistake most make is staying wrong.
Many traders say they use a 'mental stop'.
Mental stops open the door to a breakdown in discipline. It either says, "I have no real idea where to place my stop", or "I'm going to be subjective about it depending on how the trade performs".
What we do know is that mental stops are going to be influenced by your emotions. And my experience is your mind will do everything it can to hold onto a bad trade and get rid of a perfectly good trade.
It sets the scene when your trade goes against you to start adding.
A quick fire way to deplete your trading capital.
Successful traders accept that no trade will ever be perfect.
It's more a matter of being disciplined with your strategy.
And having a stop loss in place as soon your trade triggers should be right at the top of your list.
So the message is very simple...