It’s fair to say that Losing Trades are undesirable. No one likes them. They make us feel bad and, well, let’s be frank, they suck.
The biggest mistake a trader with a winning system can make, is to quit when they have had a bad losing trade.
Unfortunately, it is also the most common. As a new trader, it can be the toughest, because you have no built up profit in your account to look at and say “Well, I just gave the money back that I have already made.”
Losing trades are part and parcel of trading. They will happen. At ComhlaTech, the worst losing series of trades we have ever had, was regained in our accounts in 3 months, and then profits started again as accounts achieved greater and greater returns from there. If we had quit after that trade, we would never have regained the money and would not be heavily in profit now, and that would certainly be a shame.
When you have a losing trade, it’s just one trade in a long line of trades. Maybe if you held onto it for an indefinite period of time like a Buy and Hold Investor, you would not take a loss, and maybe you would emotionally feel better about it after the fact.
We are System Traders at ComhlaTech, not Buy and Hold Investors or Discretionary Traders.
For a reason.
System Trading allows us to compound our money. The Buy and Hold Investor waits out a period of downturn, but they also wait out upturn. If I buy ten shares of QLD today with my Buy and Hold hat on, I will always have ten shares of QLD. If I have a winning system to trade those shares of QLD, I can increase the number of shares I have over and over, taking advantage of downturns in the market to trade again. A Buy and Hold Investor may reinvest their dividends or profits from their original investment, but it will never outperform trading a winning system.
Trading with a System lets us sleep at night. We know, with certainty, that our system wins over time. We don’t panic over losing trades because we know that we just have to keep trading our system and the money will return. We remember that it probably wasn’t that long ago, that we took this very same money out of the market in a winning trade or series of trades.
As human beings we do things because we know they will work in many aspects of our life – why should trading be any different?
In other parts of our life we simply do things because we know that we ultimately will see a result if we keep at it, so we keep going. Quitting because of a single losing trade is like saying “I am going to stop running because I didn’t win my first marathon.” or “I’m never baking again because my dough didn’t rise.” or “I’m stopping my diet because I didn’t lose 5lbs last week.”
Prophetick has an over 70% win rate. That’s not something that’s made up, it is what it is and it is why we sleep well at night, knowing that a losing trade is just part and parcel of moving forward. If I told you it would be “three steps forward, one step back” you would think, “That sounds good – I can do that.” But that’s only 66%, the Prophetick system is better than that. Why are you thinking of giving up?
Prophetick isn’t broken because it has a losing trade. It is to be expected. 7 out of 10 profitable trades means 3 out of 10 losing trades. If the ratio is at least 2:1 for average profit vs average loss, it is clear to see why the system wins…over time. These are averages, over time.
Losing trades are tough. For everyone.
New Traders often emotionally take a losing trade the hardest, and that’s ok.
Do not lose heart, dear new trader. Don’t quit because you are a bit scared. You didn’t break anything by showing up. The system will keep working whether you stay or go. Wouldn’t it be better to keep trading and take the money back from the Market? It is impossible to know whether or not YOUR first or second trade will be a winner or loser. A look at history will tell you that with the ComhlaTech system you will ultimately win – and isn’t that why you started?