Please read the first part of How To Trade Out Of A Bad Losing Position Back Into Profit to understand this second part. The EURUSD pair starts to fall. You are happy, you plan to add the third lot at 1.3000. If the pair reaches this level, it means that the momentum is there for it to fall more. The pair falls, never reaches this level rebounds and makes a new high at 1.3420.
losing positions
How to Trade Out of a Bad Losing Position in Forex Back into Profit (Part I)
You need to learn how to effectively trade out of a losing position into profit as a trader. If you apply proper money management, this situation might not arise. But suppose, you made an error of judgment and all of a sudden find yourself in a runaway trade that has the potential of blowing your account.
This situation can easily arise when you are using a mental stop instead of a real stop loss. This is what many pro traders do. They instead of using a real stop use a mental stop that they use to get out of the market. But pro traders also do another thing. Instead of getting out of the market, they prefer to slowly trade their way out of a losing trade.