Why you cut winners and keep losers, and how to flip it

You close winners fast and let losers run.

Almost everyone does. Here's how to flip it.

Small wins, big losses. Three wins of 50 dollars, one loss of 150.

You were right three times out of four, and made nothing.

Fix one: set your stop and your target before you enter. Not after.

Fix two: your target should be at least twice as far as your stop.

Real gold chart, October 19. Sell at 4170, stop at 4195, above the high.

That's 25 dollars of risk. Target 4120, 50 dollars away. 2 to 1.

Price reaches 4145, the first target. It's tempting to grab the profit.

Fix three: move your stop to your entry, 4170, instead.

Now the worst case is about breakeven, before costs. Let the plan work.

It bounced to 4155, but never got back to 4170.

Next morning, it touched 4120. Twice what you risked.

Close on that bounce near 4155, and you keep 15 dollars of the move. The plan kept 50.

Save this. Stop and target before entry. At least 2 to 1. First target hit, stop to entry.

Your turn. Which one do you do? Cut winners early, hold losers, or both? Comment below.

Follow for one chart lesson every day.

go dot borearis dot com.