The Psychology of Moving Your Stop Loss

Moving a stop loss farther away because you don't want to take a loss is a dangerous habit.

The original stop represents the risk you accepted when you entered the trade.

When price approaches it, fear can make you search for reasons to keep the trade open.

You might tell yourself that the market will reverse, that liquidity is being hunted, or that the setup needs more room.

Sometimes a trade does recover. That doesn't make the decision to increase risk a good one.

If your strategy requires a wider stop, define that before entering and size the position accordingly.

Changing risk rules in the middle of a losing trade can turn a controlled loss into an uncontrolled one.