If you take the wrong train, get off at the first station because the longer the distance, the higher the cost of returning.
This Russian proverb clearly applies to trading: if you enter a wrong trade, do not cling to it in the hope that things will improve; rather, exit it as soon as possible to minimize losses. The longer you stay in a losing trade, the greater your losses and the harder it is to recover.
Clinging to hope without logic in the markets costs you dearly. A smart trader acknowledges the mistake early and moves quickly, because preserving capital is more important than recovering losses.
Just as getting off at the first station reduces costs, exiting early from the wrong trade protects you from financial collapse.
