Trader losses often occur during periods of significant market volatility or when there is a specific market trend. If you correctly identify the trend, it can become difficult to let profits run; fear of losing those profits may lead to premature profit-taking. Conversely, if you choose the wrong trend and fail to accept losses, you may end up losing more than usual. This situation is often much easier to fall into than allowing profits to run. These two factors counterbalance each other, resulting in an overall negative profit margin.
Moreover, what’s even more important is: YOU HAVE NOT PREPARED A PLAN FOR PRICE MOVEMENTS.
Preparing scenarios for price movements will help you anticipate market directions. From there, you can create a specific plan for volume management, stop-loss levels, and avoid being reactive to the market's extreme and unexpected movements. Preparing for the worst possible outcomes will give you a stronger mindset throughout your trading career.
