• 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.

Source:TH