Cut Loss Before It Is Too Late

Cut Loss Before It Is Too Late


Before I became a professional trader, I was a martial artist. In any kind of martial art, before you ever learn how to hit your opponent, you must learn how to prevent opponents’ attacks from killing you. This is the same in the investment world. Before you learn how to win big in the market, you must learn how to cut loss. If you want to become a professional trader that is able to earn a steady passion income, you must stick to a investment plans and a reasonable cut off point.

If you own a garden you will know the truth of disciplined gardening. It is far easier to get rid of small weeds regularly before they have grown long strong roots. If you commit yourself to clean the garden every day or at least regularly, the garden will naturally reward you with beautifully flourishing flowers.

Bad things happen if you do the opposite. Roots are allowed time to grow and deepen. Weeds will then be very hard to be removed. You will spend much more time dealing with them and have less time on what is truly fruitful. You will be frustrated by the ugly weeds and your flowers will die of lack of nutrition.

Losses in investment accounts must be treated like weeds. They must be dealt with when they are still small. Then your account will always stay healthy and growing.

Some thinks that a good investment trading is one that never loses, but it isn’t. Losses will always happen and should be counted as an operating expense. And they behave like weeds in garden. It is easy to deal with small losses but it is almost impossible to deal with when they get big, because of the serious chain reaction they give rise to.

If you choose to handle the many small losses that appear day by day, then you will not have to tell people about how unlucky you are when you lost the whole sum of money in an investment event.

Learn more about currency investment:
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