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    Is There Anything We Can Do after We Won or Lost?

    Abstract:People seldom make the right decision.
    1200-627-after

      People seldom make the right decision

      Suppose that one trader has lost his funds by 50% in equity investment and wishes to double the rest to get back to where he was. Some traders under this situation decide to take a more careful and conservative trading strategy thereafter. However, they keep doing the same things as before with different fund sizes. In this case, this trader will find it much harder than before in recovering the fund. Conversely, if the traders have already doubled the rest by successful trading strategies, they will always face two options. One is to invest the fund at a maximum level and make the trade as usual. One alternative is to close half of your position and start the trading over again with the original position size to sustain your profit. The decision is not easy to make when these situations first occur.

      

    VK

      People in the first assumption are determined to change their trading style. They frequently remind themselves of being conservative in trading and halving the trading lots. As a result, they earn much less profit than before and are exposed to the same possible level of losing. This dilemma is caused by the inflexibility of the trading style. Normally people will accept more aggressive trading strategies rather than conservative ones. But traders who are afraid of losing again start to suspect whether their profitability is enough. The quickest way to get rid of the self-locked trap is to decrease the trading frequency and enlarge the trading lots.

      Ideally, traders are likely to sustain their trading style with a doubled position. But they are likely to follow the steps of those who are in an imperfect condition. They trade in a more conservative way to avoid losing the profits they won. However, when the traders are in the inevitable losing periods, what they earned will fade twice as quickly as before.

      So the wise action after winning or losing is to close the position in good time and top your account up in a worse period.

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    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
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