Guest post from visionsofaffluence.com
In the world of trading there are very few mistakes that can be a costly as the one I am going described to you in this article. This mistake can be so costly that I have personally seen it set traders back years and even end some careers. This is also a very common mistake as pretty much every trader I have ever talked to myself included myself. So then what is this common mistake that could be debilitating to your trading career? That’s simple; it’s called moving your stops.
Moving your stops is one of the most dangerous things a trader can do so then why do so many of them do it? It’s because of one of two reasons. Either its because they are so fearful of taking a loss that they keeping moving the stop back in the hopes that the market will turn and they can get out at breakeven, or its because they are so sure in their ability to predict the market that they move their stop because they just know that if they give the trade enough time eventually it will work out. Unfortunately 99% of the time both of these traders are wrong and are left huge holes in their trading accounts.
To avoid the above scenario all you have to do is stick to your stops. You need to realize that they are there to protect you from losing more than you can afford. That’s why they are called stop losses because they are designed to stop you from losing more than you are willing to, and when you move them after you are already in a trade because of your emotions then you are defeating the purpose of using a stop at all. So do yourself a favor, when you set a stop do not move it under circumstances unless you are moving it up to trail a winning position. Trust me your trading account will thank you.
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