Dealing With Losing Trades

Image result for disappointed on laptop

Very disappointing trade that one.  The overnight market dropped like a stone.  The Nasdaq trade was actually briefly in profit yesterday, however, it was such a steep fall last night that it was one of the biggest overnight drops I have experienced in Nasdaq futures, not unheard of but brutal just the same.  At the end of the day, despite being disappointed, I must accept that this is a losing trade, and in system development, there will be many.  This happens to be the largest loss I have experienced this year, but I basically made the same amount on the last trade, so while I am disappointed to give it back, sometimes I have to accept that perhaps it wasn’t mine to begin with!

Risk management and capital preservation is the number one consideration.  The system is right about 60% of the time, and my edge is that my winners are on average 2.5x my losses.   I, and anyone who follows me, are still ahead considerably for the year, but risk management comes first, and the system told me to exit this fall and so I have, without question, without thinking about it.  I know I will be trading a long time and these last two trades will one day be a blip in a back-test, and a lesson in a seminar, about why taking every trade is important.  It doesn’t feel that way today though, so I wanted to send out a note to everyone to let you know that I feel your pain, but it will recover.  It always has.

Let’s see what the next trade brings, we are back to being oversold and there will be a bottom soon.

Anyone who has attended our Power Up Your Investing course will remember that losses are part of the game.  Time to dust off and keep playing!

John


It Feels Good to be Right!

Nothing will humble you like the stock market, so don’t mistake this posting as some kind of boast about how my system just nailed the turn on this current short term top.  But, I also feel it would be remiss of me to not mention it and celebrate it’s awesomeness in calling the swing yet again.

I am out, everyone is flat, now I wait for the next trade, and I would love to see it dive lower still so I can do it again!

To our success!

John


90% Probability of a Winning Trade

Great to see the market recover, however, I had a very strong stat that gives me reason to believe that we will see a significant bounce off the lows from last week.  The indicator at the bottom of this screen is the part of the algorithm that records when the price is at an extreme oversold level after a panic.

Historically, this indicator has had a 90% probability of allowing the algorithm to enter a new order to go long and expect this to be at least a short term bottom, and that is exactly how this has played out so far.

Nobody knows how high the Nasdaq can go, but my guess is the QLD will at least be above $90 this week, possibly even today.  My entry in the QLD is $85.06, so it’s looking good so far, but hoping for more.

Bring on the bulls!

John