The Art of Cutting Losers and Letting Winners Run in Crypto Trading

One of the most important rules for trading financial markets is cutting losses quickly and letting winners run.

Generally, you want to let your trades that are in the green run as long as the market is willing to provide.

This fundamental rule set for trading winners and losers is widely known, but it is often forgotten by both novice and professional retail investors alike, as emotions tend to take charge.

The instinct to know when to cut or exit a trade comes from experience and the ability to cultivate value from your stringent trading rules is what separates the novice from the professional.

The toxicity of emotions in trading cannot be overstated, so cut those losses and let your winners ride a little while longer, especially if you see no reason to end the trade then and there.

Trading is the opposite of investing: Both trading and investing involve seeking profit, but they pursue that goal in different ways.

Remember you are a trader: When in a loss, most traders go from being speculators to long-term investors in no time, citing sound long-term fundamentals.

Revenge trading is a big no: Revenge trading is that irrational desire to win back losses in the shortest possible time and usually from the same market that you lost money in.

That again leads to traders taking quick profits and letting losers run, leading to even deeper drawdowns.

We would be making more money on our good trades compared to what we would lose on bad trades.