But wouldn’t it be better to just liquidate the losing positions?

Well… no. If you assume the market is moving directionally (e.g., tanking), then cutting off the losing positions makes sense. But what if the market bounces? Then, the previously profitable positions (which would have been left open) will start losing money when the market reverses, and the liquidated positions won’t be there to profit off the bounce.

The important thing is that we respect any risk mitigations you put in place, including hedges. Ultimately, you should make active risk management an integral part of your trading.

Stay safe out there!