Counter-trend trades are lower probability by nature, which means risk management is vital both when they work and when they don’t. Taking the loss and reevaluating when the trade thesis is invalidated is something most traders think about, but managing risk on a trade that begins to work right away is just as important and not discussed as often.
Today I want to look at the importance of managing positions that begin working right away, so that we can avoid winning trades turning into losers.