Here's a good example of how to cut loss at the very first indication that one is not right.
Here are some of the arguements:
I opened those 2 longs while attending a class and thru my mobile phone on the back of the rising US indices. The trades were entered as I felt too emotionally attached to the market performance and I felt I am missing something.
> I guess I just did it because of boredom and that was the first thing to make me think twice!!
Other thing is that I longed 1 standard lot in EURJPY but due to some mistake I longed 2 standard lots in GBPJPY which doomed this trade from the outset.
> Next thing I didn't cut exposure in GBPJPY immediately and left emotionally vulnerable.
Well the rest is history - but what makes me feel uncomfortable is that I was CONFIDENT that FED liquidity injection (200 bio USD - matching a 75bp rate cut on 11.03.2008) was just a short term cure for the financial sysytem and the TREND was DOWN.
I entered LONG on the assumption that the short covering would extend also today but on the charts I see I actually hit the exact top both in S&P and DJIA and the EURJPY & GBPJPY. Well if I had my seat comfortably looking the charts unfold I wouldn't venture into sucha a stupid act!
One thing to be ahppy about is I didn't HESITATE to take the loss (36 pips in EJ & 52 pips in GJ).. Well, I could have cut both positions once I saw on the mobile phone that things didn't work as expected but this I take as my MISTAKE - as I procrastinated to take the loss immmediately I had a signal that I was wrong.
That's all - trade with the trend - run the profits and cut the loss immediately.