Selective Forex Trading:

Chapter 11. When to Bail Out of the Trade and When to Stay In for Additional Profits

As I said in the Introduction, "The greatest distance to overcome in each trade is found between the ears."

Every trader has experienced a trade where maybe you see a few pips of profit as you trade toward a legitimate profit target, and suddenly the trade begins to move against you. The logic in your brain tells you the target is a good one and the entry was a perfect entry point, so why is this trade going against you? As the indicators become more and more negative as the loss is quickly approaching your protective stop, panic begins to settle in. You reason that the target is good and that all you have to do is to move the stop a little further. Of course, then the market moves even faster toward your stop, and your reasoning power suggests that you should move the stop to an even greater area of protection, risking even more of the margin. If the market does turn back toward your original limit, which may take hours or even days to surrender, most traders are so happy to see even a small profit that they will escape the trade with only one to five pips of profit. The problem is the market was chasing you (the trader) on the wrong side of the trade, instead of you chasing the market on the profit side.

So get it straight between your ears before you lose your entire margin. Calculate a stop and stick to it, right or wrong! You can always get back into the trade and make your money back if a loss ...