Originally Posted by thehawkman
Then I got stupid. Annoyed at having to watch the charts non-stop (my job allowed me to do that) and stressing over and babysitting the open trades, I thought I was smart, deposited 12,000 dollars and tried to do carry trading (think of it as buy and hold while you collect interest on your position). Guess what, the EURUSD tanked like crazy, meaning the dollar strengthened like crazy and all my carry trades shot up like rockets (precisely the opposite of what I wanted them to do, because I was short the dollar i.e. long the high yielding currencies). I managed to close all my positions with an uncanny precision just as the market reversed, meaning that if I hadn't broken down, because the stress was eating me alive, I would have made 60% on those 12,000. Now I'm bruised and gun shy and 7,000 dollars short.
Perfect example. It is not appropriate for a trader to close positions at a loss (meaning that sacred stop loss is not sacred at all). What the trader has to do is calculate things at entry so it doesn't matter if the position goes into a loss. As a trader you never exhaust your opportunities to enter the market. It is your job to average down your entry prices and average up your exit prices, it's not your job to predict the prices. Sometimes you need to close at a loss when you see a fundamental shift in a pair. Those times are very rare.