A common mistake of novice traders after taking a large loss is to succumb to the temptation to “make it all back” by initiating high-risk trades. This thinking hinges on the gambling mentality that afflicts many people in the market.
If you find yourself thinking this way, do not follow through.
If you lose your discipline and allow a small loss to turn into a big loser, do not compound the problem by making emotional decisions in an attempt to recover from the original mistake.
Always remember this tip when taking a loss:
Small losses allow you to remain trading and learning, whereas larger losses can abruptly end your trading career.Make All Your Losses Back,