As the proverb goes ‘a penny saved is a penny earned’ traders concentrate so much on the potential profits they can get that they do not put enough attention to their own capital, and this is kind of weird as the profits they could get are not even real right now but the money in the exchange they are using is very real and as such an effort should be made to protect it no matter what, but people get blinded by the profits they can get and as such they lose sight of the thing they should care the most about which is their own capital.
especially for novice traders where their orientation is to get a lot of profit and fast. This mindset can hinder our trading success. especially if their analysis is wrong, they seem reluctant to cut losses, even because they don't dare to see the market they let it go and do other activities, and in the end they lose even more. therefore it is very necessary stop loss
And this is the kind of thinking that produces huge losses, it is important to not take anything what happens in the market as personal, if you make a prediction and then the price begins to go down and goes against your prediction there is no reason to get defensive, just accept the fact that you made a mistake and it is time for you to move on and accept the small loss, because if you do not then you are going to suffer even more losses because you decided to not close that trade.
