How To Cut Your Losses Short

Step-By-Step Method to Set Your Trade Invalidation Rules

We've all heard the saying: "Let your winners ride and cut your losers short." It sounds good, but it’s something traders struggle to put into practice. The letting winners run part is more interesting and gets emphasized in the trading community, but cutting your losers short is way more important. Without this ability, every profit you might be able to maximize gets thrown out of the window.

How can you cut your losses before price hits your stop-loss? Today, I'll explain how you can practically do this with a simple step-by-step method.