If I don't risk money, I stand no chance of gain.
This is the ever-present mental battle of trading markets.
Knowing when to cut a position is the game.
There is nothing worse than seeing a profit turn into a loss. Whether it be through over-trading or greed.
But cutting out early, only to see it run away without you is a pretty awful feeling as well..
And if you never cut a losing position at all... Well that's how you take huge hits.
I always have these big macro thesis. I always want to catch a big move. Hit a home-run. But sometimes that causes me to make foolish mistakes. I am no oracle, just a man. I cannot will the market to do what I want. All I can do is speculate and manage risk.
Every day is a battle and nobody knows what this life or these markets will bring.
Your conviction will be tested. Your mental fortitude poked & prodded.
They say let your winners ride but cut your losses quickly.
So when do you cut a position?
That's the question I cannot answer...
I will say one thing. Lock in those profits. Trail that stop.
You don't know what this market is going to do and it can turn against you very quickly and knife you in the back.