Following a trend is possibly one of the hardest decisions a spread trader can make, mainly because traders are not ‘followers’, they are individuals, usually with nerves of steel.  They have to be like this because it takes a special type of person to take risks.  Therefore Trend traders must swallow their natural inclinations and go with the flow sometimes.

In trend trading it is imperative to cut your losses and let your profits run.  This does sound quite simple, but a lot of traders have difficulty with this for a range of reasons.  It is not always easy to admit you have made a mistake for one.  It is far easier to save face by adopting the attitude that things will turn around, plus the reasons you entered the trade in the first place are still there.  Even if you are losing daily it is easy to give yourself one more day.

As time goes by, you start to panic, but still you reason that things will turn around, you reason that you have lost so much already, what is a little more?

Experts on trends will tell you that if the position is still against you on day three, get out!  Cut your losses before it starts playing on your psyche.  Retrain your brain and cut your losses NOW!

Forget about your ego, study other successful traders and you will see that they have numerous losing streaks; it is just that they know not to outstay their welcome.