Should Traders Suffering Continuing Losses Take a Break?

WikiFX Strategies (9 Feb.) - Many traders asked similar questions: “Should I take a break when suffering continuing losses？” The answer is NO. The break under this context refers to the cessation of trading.

Traders long tracking investment products will find them in mixed trends. If they stop trading in the face of continuing losses, which indicate bearish markets, chances are they will miss the opportunity to earn profits.

As traders' strategies may only work in 30% of the cases, a trial-and-error process is necessary for them to find the opportune trading time. However, frequent errors will lead to net losses. Here are two methods to avoid it:

1. A single profit should be high enough to top up losses for at least three times

2. The position in the stop-loss level should be lower than or equal to that in profits

A break is acceptable in the following conditions:

When traders' techniques are unqualified, especially when they are unfamiliar with the tactics and have lost huge sums of money

When traders are not confident, especially when they don't trust their own tactics and feel lost about the prospects

Traders in these cases should better focus on theoretical studies before practicing transactions.

Another situation in which traders could take a break is when they are earning steady profits. Otherwise, they should continue trading as usual. Qualified traders are capable of self-adjusting. For example, they could stay calm when bearing uninterrupted losses and have the gumption to continue placing orders according to signals.

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