What is ‘uncle point’ in Finance?

  • This refers to the maximum amount of pain, as defined by the size of a paper loss, that a trader is willing to incur before he gets out of a trading position.
  • In other words, it is the point at which a trader is unwilling to incur any further losses and decides to throw in the towel and get out of his trade.
  • Traders are advised to clearly define their uncle point before entering a trade in order to cut their losses quickly, thereby avoiding situations where they are locked in with unbearable amounts of losses.
  • It originates from the American expression “Say ‘uncle’!”, wherein an opponent in a battle is forced to utter the expression as a mark of surrender to his opponent.


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