FX Trading Operations Room - Eliminating the sources of beginners' failures with data accumulated since 2008! Episode 11: Why can't people cut losses? [FX Strategy.com Editorial Department]

From the position of publishing Japan's only monthly FX information magazine, the purpose of this project is to extract the mistakes and common misconceptions that many traders tend to make and share them with you. This time, we would like to think about “why people cannot cut losses.”

Even though we know it, the need to cut losses

Few people who are not good at cutting losses consistently make profits in FX. To trade stably, cutting losses is necessary. This time, we will consider why people cannot cut losses.

That said, many individual investors understand in their heads that you cannot win without cutting losses. Not only in our magazine, but in any media you watch and any professional trader you learn from, the importance of cutting losses is always emphasized.

Except for exceptional management styles like repetitive automated trading, it is almost inevitable that you must decide to realize losses with your own will.

Nevertheless, many people are poor at cutting losses, and the only explanation is that there are factors that obstruct cutting losses.