Yes, losses can happen... Part 2

OK, onto if we look at the 5min NQ chart, we can see a very good looking TS3 sell, that did start to decline nicely. However, it reversed and rallied, which was against our anticipation.... As the trade was so far into profit initially, stops should have been at break-even so at least this should have only been a break-even trade.

But then almost immediately we got another sell. But this one resulted in a 1-R loss. So, yes, overall this would have been a losing day.

Yes losses can and do happen, this is what I talk about with the Cyclical Nature of Trading, the good news is that soon the cycle will come round to some profitable trades. Our job is while we are in the losing part of the cycle is to keep the losses small...

Thanks, Steve

Yes, losses can happen...

Hi Everybody,

Something that many amateur traders cannot understand is why a loss can unfold, when everything appears to fall into place perfectly (?). Well, welcome to the real-world, that is why trading is called “speculation” as all we are doing is speculating on a probable future outcome. And probabilities are never 100%. So yes, losses can and do unfold, anybody who tells you otherwise is not a professional trader......

Here is a good example: where yesterday the 15min YM looked to be setting up for a TS1 sell, so we “assumed at the time” that the larger degree trend was down, so were on the lookout for shorter-term sell setups.

OK, onto the 5min NQ chart.

Thanks, Steve