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Falling in love with a trade
By Tom Long | July 25, 2007
It’s very easy to get stuck in a trade. Perhaps you worked on the analysis for a long time and everything seemed to be lining up so perfectly that it just had to be correct. Once that trade goes against you it can be hard to accept that and stay in the trade as it goes even more against you. At one point you will be so invested in that trade that you can’t close it out as the loss would be too large.
This is why it’s so important to swallow your pride in these situations and just realize that you were wrong and take a small hit.
Tags: dollar, forex, forex news, forex trading
Topics: Don't Trade Like This |
July 27th, 2007 at 9:39 am
Unfortunately I think all investors have had this experience. The amount of time and research that I spent before purchasing a stock makes it all the more difficult to admit a mistake. As an experience investor would say “patience” in the long run wins, the stock slowly sinks further down making it increasingly more difficult to let it go. And as you so rightly said “This is why it’s so important to swallow your pride”, the only problem is that no matter how many times its happened, its always easier said then done.