April 9

How To Take Losses But Still Make Money

My Typical Trade Walkthrough – Losing Trade


Last week I showed you a typical trade using one of my strategies for buying stocks that are in an uptrend.  I am looking for strong up-trending prices, and then short term weakness in which to buy.  I then sell the position into strength.

If you didn’t see it then you can check it out here.


It just so happened that the previous example was a winning trade


Well today I’m showing you another example, but this time it’s a loser!  It’s actually my most recent losing trade too.  I mentioned in the previous example that winning trades come along more than 65% of the time, so, as breakevens are quite rare, the losers appear less than 35% of the time.


Let’s Explore The Losing Trade


PVTB Long 3/25/15


pvtb daily


Completely legitimate trade….


  1. Uptrend – I’m only looking to buy strong stocks in a clear uptrend
  2. Oversold – I get a Buy Trigger when prices become short term oversold.  I place a limit order to enter the next day at the closing price of trigger day (shown by the upper horizontal line on the price chart above).
  3. Overbought – Prices continued to fall after I entered, becoming even more oversold.  Prices rarely hit my wide stop loss.  But I’m looking to exit into strength.  After a powerful up bar, I see RSI has become oversold and I enter at the open the next day (shown by the lower horizontal line on the price chart above).


This trade resulted in a loss of 0.73% or more importantly, -0.11R

I am very happy with this trade even though I lost money.  I have rules and I traded them perfectly.  I would take this trade again any day.  No regrets.  That it what having a rule based strategy is all about.

My strategies are robust and are completely suited to my personality.  I will never analyse a losing trade and get upset about exiting too early, not exiting early enough, leaving money on the table etc.  What I look for is efficiency in myself as a trader – have I traded to the rules of my strategy or not?  If I have, then great.  If I haven’t, I’ll go to work on myself, improving my efficiency.


So there you have an example of a losing trade within one of my strategies that have a positive expectancy.  A positive expectancy means that over a large enough number of trades taken, after all the losers are deducted from the winners, it is profitable.

I hope you enjoyed this quick insight and remember to check out the previous winning example here.

If you have any comments or questions then please leave them below or email me at jarrod@thetransparenttrader.com





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