Kardec Trader explains how to stop blowing accounts: when price breaks above the pre-market high after 10-11am, your short setup has failed. Instead of adding to losing positions (the revenge trading that kills accounts), downsize risk, cut exposure, or flip to long.
If something is breaking above the pre market high, you can kind of assume that the pattern has failed. It's no longer an ADF pattern. There's no chance. Right? Especially after 10am so after 10am or 11am, if a pattern is failing, then I'm looking to downsize my risk on the short side, limit my exposure and even flipping long. So this has been the biggest change that I made this year is that I'm not as stubborn on the short side because in years past I would probably just keep adding, adding, adding and holding as the stock is ripping and then you're losing more and more. So that kind of revenge trading is what causes these massive blow up losses.
