Knowing when to cut losses in forex comes down to discipline, not emotion. A common rule is to set a stop-loss before entering any trade and stick to it no matter what. If the market clearly breaks your analysis or the trade setup is no longer valid, it’s better to exit early instead of hoping it will recover. Small controlled losses are normal big uncontrolled ones destroy accounts. The key mindset is protecting capital first, because you can always re-enter another trade, but you can’t recover wiped-out funds easily.