Don’t add to losing trades
Another very common trading mistakes that people make is adding to a losing trade. The thinking is that by adding more to the position the original loss will be compensated by an even greater reward. It is an easy mistake to make, but it ends in over exposure to one market. It may work on occasion in your favour, but when it goes wrong the loss is much worse than it ought to have been.
So, don’t add to losers. Establish your risk tolerance at the start of the trade and don’t expand that risk exposure simply because.a trade is going against you. Be rational.