What it means
It drives holding losers, moving stops and grabbing small wins. Decide stops and targets before entering and place them as orders.
In practice
Because losses hurt more than equal gains please, traders bend their behaviour to avoid the pain: they hold a losing trade in the hope of getting back to even, and they close a winning one early to make sure of it.
Accepting the loss before entering is the practical answer. Risking an amount small enough not to matter, and counting it in R, makes a stopped trade an ordinary business cost.
What to watch for
Moving a stop further away, or adding to a losing position, are loss aversion in action. If a loss at your current size would upset you, the size is too large.