Trading Matrix

The trade is underwater. You have been holding it. And instead of evaluating whether it still deserves to be held, you are evaluating how much you have already lost in it.
That shift is the sunk cost trap, and it is one of the most expensive mental habits in trading. The money you have already lost in a trade is gone whether you close it or not. It has no bearing on where the trade goes from here. The only question that matters is whether the current setup, at the current level, with the current structure, would qualify as a trade you would take fresh today. If yes, hold it. If no, close it. The loss to this point is irrelevant to that evaluation.
But the brain does not work that way by default. It attaches the current decision to the history of the position. Closing a losing trade means realizing a loss, admitting a mistake, making the red number permanent. So traders hold. They wait. They create narratives about why the trade still makes sense that are built entirely on the desire to avoid closing at the current level, not on any structural reason the trade should recover.
The professional version of this is to run a simple test when you are in a trade that is going against you. If you did not already own this position, would you buy it here? If the honest answer is no, that is your exit signal. Not the level where you originally placed your stop. Not the level that would make you whole. The answer to whether you would buy it here, right now, with fresh eyes and no prior history.
The trade does not know what you paid for it. It does not owe you a recovery. The question is always what the chart is doing, not what your account thinks it should do.
Evaluate the trade, not the loss. One of those is in your control.