One bad thing trader’s fall into the habit of doing is to try and get every last tick out of a trade. We have all experienced a trade that started off great then turned out to be a looser. Then there is the trade that starts out with a small loss and turns out to be a really large loss.
No one can pick the tops and the bottoms so when it is time to get out of a trade just get out. Each trade is only one of many if a trader watches what is going on. If a trader lets it get out of hand then the trade may be the only one.
Many times a trader knows he should be getting out of a trade, but for some reason or another they miss the chance and get stuck in the position. When we do not get out of a trade when we should, more often than not it is a costly mistake. This is one good reason to trade with stop losses. The first loss is usually the smallest loss.
Once an exit is missed, a trader has two choices: wait for the next opportunity to get out or get out no matter what the price is. Waiting for the next chance to get out is how a trader can get into trouble. Once a trader knows he is wrong he should exit the trade without looking back. Just go on to the next trade this bad trade is only one of many trades unless he stays in and losses a big peace of his account.
A trader can lose his confidence, lose his trading account, and end up getting out of trading by not exiting a trade when it is time. This is what a good exit is worth.