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> Is underperformance a major cause of forex losses?
It's more likely that over-lossing is due to the desire to be right all the time.
not so
The inability to work against a loss
The first thing that should be of interest is limiting losses. There is no more important task in the market. As predators, you take aim, take your prey and run. In case of danger, we even give up the prey if we have to. This is what it looks like on the graph.
After a deal has reached a good profit - it should not return to the red zone even for a ghost hope to reach bigger profit in the point of "exit3" - this is a lottery with an unknown outcome. You should trade a single movement on the selected dimension, from now to now, without looking ahead a few steps into the future. Set an initial stop on entry, and move it to "zero" or "breakeven" as soon as possible.
At the point "Exit 1" we are early, everything is good, the price goes in our direction, there is no need to cut the profit. At the point "Exit 2" it is time to exit. If after all we have not got out - price should not fall below zero line and go to the zone marked with an oval.As a last resort we may close in "zero", i.e. on "break-even" price, but in no case transform profitable deal into loss-making one. Staying with your money is not a bad thing.
The first thing that should be of interest is limiting losses. There is no more important task in the market. As predators, you take aim, take your prey and run. In case of danger, we even give up the prey if we have to. This is what it looks like on the graph.
After a deal has reached a good profit - it should not return to the red zone even for a ghost hope to reach bigger profit in the point of "exit3" - this is a lottery with an unknown outcome. You should trade a single movement on the selected dimension, from now to now, without looking ahead a few steps into the future. Set an initial stop on entry, and move it to "zero" or "breakeven" as soon as possible.
At the point "Exit 1" we are early, everything is good, the price goes in our direction, there is no need to cut the profit. At the point "Exit 2" it is time to exit. If in any case we have not got out - price should not fall below zero line and go to the zone marked with an oval. This is not a "profit taking" - we wait in the hope that the curve will yield to the point of "exit3" or at least "return" back to the point of "exit1/2", giving one more chance to close in the black
I almost directly described how the Grail works :))) I even drew it :))) There are still some details, of course. But not that important - the essence is in the picture.
painted?
When a trader doesn't make enough profit on a trade, he eventually loses because the losses start to outweigh the profits.
Only greed and fear are the 2 reasons for forex losses. However, in other areas as well.
cut the profits and let the losses grow
cast in granite!