Suppose my past record says I have 80% win ratio. I gave a call here to short Havells. Now here are two scenes
Which one do you prefer?
In the answer, every single attendee voted 1 which means they don’t think my trade can make more loss on 1 or make more profit on 2.
This is complex psychology which let you modify my trades to yours.
Let’s take this famous Bank India trade.
We had it shorted and were tanking proudly. To minimize it, here is what I am doing. I am closing at the first point because of the price action.
And re-entering it on the second point. In this case, we are hence stopping us from potential upside but also keeping the trade open. This is what I do. What do you do for Stop Loss?
Swing High, Fractal ~ All are the concept of price action. But once you leave a red trade, your trade psychology will forbid you to re-enter the trade and hence you will end up in loss.
Your trade psychology will forbid you to re-enter the trade which you had made a loss so cautious.