- Remove entry criteria to add to losers
- Add stop criteria to use a HARD stop
- Set trading rules to walk away after hard stop is set (or use alerts)
- Add criteria to be more specific on when to add (only add at x level with y stop)
Let’s assume you’re a day trader. Once you get in a position, price keeps going the wrong direction. You add to your loser and price keeps going. You eventually stop out and end up with a big loss. How do you fix this?
1. Change entry criteria
Change your entry criteria to add a hard stop on your position immediately after getting into a position. Set rules for yourself where you aren’t adding to losers.
2. Use a Hard stop
Adding a hard stop will force yourself to get stopped out no matter what. It will save you from adding to your losers
3. Walk away after you set your trade
After you’re in the trade, set alerts for your stop and target. Then walk away from the screen. You won’t be tempted to add to your losers or even worry about your position
4. Be more specific with entry criteria
If you allow yourself to add to losers, be morspecificic with it. Only allow yourself one add or only add at a certain price/time parameter.