When Trading Losses Mount Put On The Brakes

In Case of Emergency, Pull Cord.

In Case of Emergency, Pull Cord. That’s a sign that all bus and subway riders are familiar with. An emergency cord is standard equipment on busses and subways. If an emergency arises, riders know to pull the emergency cord to bring the bus or subway to a stop. 

The emergency cord is prominently placed so that it can be quickly reached by any rider. Pulling the cord brings the vehicle to a stop, theoretically by bringing the emergency situation to an end (for some reason, there’s no emergency cord on airplanes). Every day trader also needs an emergency cord.

Without having fast access that enables the trader to bring the emergency situation to an end, the situation gets worse. Just as on a bus or subway, day traders need to apply an emergency brake to the losing trade. You would think that a trader who is in a losing trade would instinctively close his position, limiting the loss. That’s not the case, as statistics show that many traders in a losing trade hold on, hoping the trade will reverse and curtail the loss. 

In this video, I suggest how traders should deal with emergencies, and have fast access to an emergency cord when the situation arises, as when a trade becomes increasingly unprofitable.

Having as much information as possible gives S&P emini day traders a big advantage over “seat of the pants” traders. It cannot be stressed enough that without learning as much as possible about the market, it is highly unlikely that a trader will succeed at making money by day trading S&P emini futures, much less in a trading career.

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