The Bull has lost steam just when you got the confidence to get in ! Or you felt the markets have been going up for like eternity and all that goes up has to come down so you shorted the market ! Losses can come more times than you desire and then you are Fraught With Losses !
I got a request for a bailout plan from one such loss maker after he took a tempting call for shorting the markets from a Large Fund House.
Markets are dynamic and so one cannot be guaranteed of an absolute return, a point which most non-professional market participants fail to understand, thus being on the losing end more times than not.I am writing about this topic not to repeat the rules of trading but just to let you know that there is no bailout in such a situation.
So what does one do to end this misery ? Cut your losses. Selling, whether we are in profit or losses is more difficult than buying as selling is tied to the emotions of fear and greed.Not cutting losses would lead to more losses in terms of money, time, effort, and lost opportunities.So cut your losses unemotionally.After you have done it your head will feel lighter.Your monetary losses have been quantified and you can start looking afresh for oppurtunities to make up the loss.BUT, make sure to have a strategy in place before getting into the markets !
follow me on twitter http://twitter.com/#!/lucksr
Happy Trading !!