A trader often loses money because he takes a trade with one goal and manages it as if he entered with a different goal. For day traders, this usually happens because the trader entered anticipating a subsequent price swing, but instead he managed the trade like a scalp. For example, say the trader shorted the EUR/USD in the forex market at what he thought was a strong top. He was planning on holding for a 100-pip (tick) profit, while using a 20-pip protective stop, but instead the trader exits whenever he had a 10-pip profit (ensuring he will lose money over time). The trader might consistently convince himself that the price action unfolded differently from what he expected, and this change in his premise justified changing the trade from a swing to a scalp.
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