Do not add to a losing position

[SweetPrincess]

A losing position is a red flag, It’s a sign that your trade idea may not have been a good one.
My advise is that do not add to a losing position that cannot be overdo. . It is far and away one of the most damaging mistakes a Forex trader can make, but it’s also one of the easiest to correct. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice.

 

[Michelle Yeoh]

This is way, I use money management policies so smartly! Yes, I am not making 100% success ratio here, but the thing is end of the month I can easily make enough number of pips in my live trading! By the way, I use only 1% risk in my per trade position.

 

[Ary Barroso]

Actually, we should verify our entry points by many ways before opening a new trader; otherwise, we’ll suffer a lot. Forex market is risky for the low skilled Forex trader.

 

[J_C_Anderson]

Sometimes it could be an exellent opportunity, if:
- price movement caused by some external issues like the correction of the broad market,
- fundamentals are still well,
- there is a well-known setup (formation) you have experience to trade,
- risk is small enough.

Only in suh conditions adding to losing position can improve your situation. But never, never add position just to change the average price.

 

[harryfibo]

What do you mean by not add to a losing trade? Do you mean not to add more equity or not to place another trade to support it. A trader who applies proper money management technique has nothing to worry about.

 

[Ann]

A losing position does not always indicate a wrong trading decision. Sometimes the lower the price falls down, the greater the chances that it will rise up. If you still stood against the trend, then you really made the wrong trading decision and you can not be added to a losing position. And in the flat.

 

[Ary Barroso]

A losing position does not always indicate a wrong trading decision. Sometimes the lower the price falls down, the greater the chances that it will rise up. If you still stood against the trend, then you really made the wrong trading decision and you can not be added to a losing position. And in the flat.

Very smart observation; really trading based on the market trend is very much useful practice! Besides, there is nothing like obvious in Forex, it’s all about probabilities.

 

[J_C_Anderson]

For sure, sometimes it would be a great idea to add some on pullback, but make sure that it is not a trend reversal.
In some cases, buying in the opposite direction could be profitable, but strict risk management is necessary in such case.

 

[Ary Barroso]

For sure, sometimes it would be a great idea to add some on pullback, but make sure that it is not a trend reversal.
In some cases, buying in the opposite direction could be profitable, but strict risk management is necessary in such case.

Trading according to the against on the market trend is always challenging. So, pullback trade setup is not easy to play with, it requires a smart trading skill for sure.

 

[J_C_Anderson]

It is difficult, but sometimes it the only way to increase position. For example, if you have mid-term trade based on ffundamentals, you see that price confirms you idea and you want to add to your position, buind on pullbacks will be the best way.

 

[Ary Barroso]

It is difficult, but sometimes it the only way to increase position. For example, if you have mid-term trade based on ffundamentals, you see that price confirms you idea and you want to add to your position, buind on pullbacks will be the best way.

I got your point; but in my live trading I completely avoid trend-reverse trade’s positions.

 

[Think Pad]

A losing position is a red flag. It’s a sign that your trade idea may not have been a good one. As George Soros said, “I’m only rich because I know when I’m wrong”. In other words, if the market moves against your position, especially for an extended period of time, it’s usually best to take a loss and move on.

 

[Ary Barroso]

A losing position is a red flag. It’s a sign that your trade idea may not have been a good one. As George Soros said, “I’m only rich because I know when I’m wrong”. In other words, if the market moves against your position, especially for an extended period of time, it’s usually best to take a loss and move on.

Since market moves based on vertical angels; so I count the support/resistant levels so seriously! In addition, in the mid path usually I don’t close any trade.

 

[Dictorsto]

Totally agree with this post.Soros is one of my favorite trader.If the market moves against my position.I always put my stoploss and may be get out the position before it touch my stoploss when I am wrong.