There are 2 schools of thought on holding losing positions. And this impacts your trading strategy somewhat. 
1) A trade is not a loser until you close it out
2) The facts are the facts, a trade is what it is at that point in time.

I adhere to both schools (maybe my downfall) and maybe rationalize my positions somewhat. Also, the brokers I use force my way of thinking. Here is how.

One broker, GFT, uses a method of reconciliation that adjusts your account everyday at market close. It rolls over all positions and sells you out and buys back in at the current rate. In the beginning it was a bit confusing, as I would be up or down, and right after the rollover, my positions would be neutral. However my unrealized profit and loss would be different. They use a method that shows your cash (what you started with), floating profit and loss ( your current reality) equity (how much you have to play with) and your unrealized profit and loss (the profit or loss that gets applied every 3 days to your account). A bit confusing for sure, but the bottom line is it treats your account the way the banks trade with one another. You placed an order, and you have to pay up every day.

The other brokers I use, let the profits and losses ride until you close out the positions. (Interbank and One World) Most of you are familiar with this system.

I actually now prefer the first method, as although you will still be holding the currency pair until you close it out, everyday you can take a reality check and face the music in a losing position.

So now back to the psychology of holding onto positions. I use the Forecasts, combined with my Daily Chart set-up along with Event Risk observation to place my trades. I pretty much trade everyday and am looking for profits within my 22 hour Forecast window. I have a tunnel vision with the forecasts as I trust them as I trust the weather. Sometimes I am caught with out an umbrella, but many times the sun comes out to dry my losing trades. And I find that if I panic and run and hide (bail) on a losing trade it soon comes back to profit.

So what is my solution? Realistic timing and flexibility. I buy myself some flexibility by not having all my eggs in one basket and have 3 accounts running. That way if I have to hold onto a position wavering between my psychological stop (my perceived point of no return) and profit (rarely do I accept a "gee, I broke even now get out, mentality) I can still trade in my other accounts. You can do this by dividing your money by 2 or 3 and applying your risk and money management as if you have 1 account.

2 weeks ago I showed a kiwi position I had go from a 120 pip loss to a 25 pip profit. Right now I am holding on to a cable position that was 100 pips behind and has narrowed the gap to 15 pips behind. Many of you would have run from these trades. Not saying I am right, and you are wrong, just my belief system allows me not to panic, observe and make a decision.

By diving into deeper profit with trailing stops, and not killing yourself with exuberant stop losses you can maximize your positions. Yes, it is a game where you can not win every time, but to me it is akin to walking the wrong way up an escalator. If you stop, you go backwards, but by moving a little faster than the forces against you, you eventually make it to the top.

And you move faster by only stopping out of a trade when the hope is gone, not because it goes against you.