You’re in a trade and it’s not working. When do you admit you’re wrong? A lot of people struggle with admitting they’re wrong. When do you throw in the towel? It depends, says Anne-Marie Baiynd of TheTradingBook.com.

I’m a very structured trader. So I trade what I see and not what I think, for the most part—except when somebody else shows up that looks like me, but doesn’t really trade like me at all. That happens some days!

But what I do when I get into a trade, the first things that I actually begin to look for is not, “Hey, is this trade going for me?” but “Hey, could this trade be showing signs that it’s going to go against me?”

So I’m immediately waiting for signals that say this is not going well because I use just two indicators. Let’s say I’m going along, I’m at a Fib level, and I wait for the moving averages to cradle that Fib level so the price is on top. If the price dips below that Fib and then falls below my moving averages, I am wrong and I must get out.

Now I might be right 30 minutes later when the set-up comes again, and I must be disciplined enough to take the set-up instead of remembering I was wrong the last time. Because you can’t have a systematic and consistent trading experience if you are only thinking about, “Oh, well, that last time it didn’t work out.” You must get back and trade what you see because what you see is what’s going to work if you’ve got a good system.

So at the first sign that I am wrong, I will get out and I’ll look for the next time that I can get in, maybe at a better price, maybe I’ll lose a few pennies, whatever it is. That’ll be the focus of how it is I’m looking for that trade.