Losing Trades Can Be Great For Your Bottom Line

Posted in: Trading Article

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We are all going to lose at trading at some point and instead of complaining and shutting the computer down, how about sticking to your trading plan and bagging a big winner?

That is exactly how those in our Inner Circle approach the market depending on the trading plan and market we are following.

There were two great examples of that during yesterday’s session (Wed, Aug 1st, 2018).  Below is a video replay of our Crude Oil Inventory Report, a great example of what I mean.

Perhaps an even better example was our YM result, earlier the same session.

 

When Bad Luck Turns Into Good Luck

When a losing trades leads to a big winning session, we don’t take the loss as bad luck but as another opportunity to stick to our trading plan.  You never have a better opportunity to see how you stand as a trader than you do in times of crisis – which is how some traders look at losing trades.

It’s bad luck if you take a correct trade per your trade plan rules and the trade loses.

Nothing is guaranteed in trading because it’s all a numbers game. The power of the trading plan is that you put the odds on your side and with enough trades and the proper risk, you grow your equity, which is another way of saying, you make money.

Bad luck becomes good luck when you have to take another trade per the trade plan rules and the subsequent trade wins big.

Had the first winning trade hit its trade plan goals, you would not have had the opportunity to grab the next, bigger winning trade. We quit our session when we hit our trade plan goals and that is why we have trading plans to begin with.

We take what the market wants to give us. 

It’s not about whether one trade wins or loses but a good trade plan and trading system, if followed, should result in long term trading success.

Inside of the winning trade plan’s results there will be a random distribution of winning and losing trades but losing trades will always be an integral part of a winning trading approach.

 

Winners and Losers

It’s not how you start out but how you finish.

  • Losing traders fret about a trade that loses
  • Winning traders take the next trade in their plan like clockwork

Our YM session tells that story and here is what happened live in our trading room.

The first trade was the worst kind of losing trade where it barely ticked, then barely ticked out, ticking us off and handing us a full loss to start the session.  Good thing that happened or we would have quit with the next winning trade and then would have missed the big home run trade that happened after that.

Losing trades can lead to big winners if you trade a trusted trade plan like our YM day trade plan with Spotlight Power Trader.

This trading chart shows the first two trades of the session.

  • The first one was the worst kink of losing trade.
  • The 2nd was a nice winner, but not enough to push our session positive.
  • Per our trade plan, we had to take a 3rd trade.

The 3rd trade negated a losing trade and delivered a home run, spectacular result, another winning session, and all new lifetime equity highs for this trade plan.

 

Our Crude Oil Trade

Today, our 2nd crude oil trade missed its ‘money management’ level by 1 tick. Had it hit that level, we would have reduced risk by moving our stop to a break even position; + 1 tick to cover trade commissions.

The first trade already hit its mm level and exited with a break even result and doing so the 2nd time would have ended our tradeplan as a wash; a break-even result.

The 2nd trade missed its money management level by 1 little tick.

As a result, it stopped and reversed for a partial loss and the reversing trade was able to move through its substantially larger target objective, allowing us to quit our session with another winning result. That happened with our YM session as well.

If you would like to learn more about these ongoing, consistently winning Crude Oil Inventory Report trades we do each week with the great Counter Punch Trader and its newer offspring, the Spotlight Power Trader, which also won big today, hit us up at info@netpicks.com.

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