Taking a loss on a trade

This long post is well worth the read to help in coping with a loss on a trade or more specifically when and how to take a loss.

clipped from blog.mdwoptions.com Q & A. Taking The Loss You are correct.  It’s difficult to make the decision.  But, it’s a necessary part of your overall trading strategy.   In the spirit of full disclosure, there are people who claim that no risk management is necessary because when you buy an iron condor you already own options that limit your losses.  But, IMHO, that’s insane.  It’s just wrong to allow losses to get so large that they overwhelm profits. It’s far better to take smaller losses, even when it means taking fewer profits.  A combination of good profits, small profits and small losses is my objective.