The reason that most people crash and burn is due to a lack of trust in their trading plan. In turn, they fail to adhere to their trading plan in disciplined fashion. Instead of understanding and anticipating the normal ebb and flow and the need to allow their plan to play to fruition with each trade, which includes inevitable losses that are managed through strict adherence to their risk management (relying on stop losses), they become undisciplined and move their stops, accepting larger losses in the hopes the instrument will turn back in their favor. Worse yet, they cut winners before they ever have a chance to run because they are afraid to see them turn back on them.
Ultimately this scared and undisciplined approach to trading - letting losers run and cutting winners short - leads to failure. Trust your plan and allow it to work and your chances of finding success are magnified exponentially.
Ultimately this scared and undisciplined approach to trading - letting losers run and cutting winners short - leads to failure. Trust your plan and allow it to work and your chances of finding success are magnified exponentially.