losing Trades - Peter Brandt Factor

How much patience should a trader have with a losing trade?

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How much patience should a trader have with a losing trade?

 

The question on losing trades, all traders must answer for themselves, and there really is no right answer. The answer for any given trader must depend upon his or her trading approach, markets traded, risk tolerance and other factors.

For me, the answer to this question is quite simple and multi-layered.

  • My initial risk per trade seldom exceeds 70 basis points and is limited to 100 basis
  • I aggressively advance protective stops within days (sometimes hours) after entering a trade.
  • My goal is to bring a trade to as close to breakeven as possible, as quickly as possible!

Do I have a rationale for my trade management protocol? Absolutely YES! My unwillingness to flirt with a trade that is squirming around in my pocket is based on experience. The trades that have most contributed to my net trading profitability over the years have two things in common.

  1. The trades worked immediately with a minimum of hesitation
  2. The trades trended to my price target in a very sustained manner

Let me use the Factor Tracking Account for 2017 to illustrate these points.

Trades opened and closed in 2017 to-date have produced 1624 BPs of profit. All of this profit has come from three markets – Mpls Wheat, Chicago Wheat and Canadian Dollar. An analysis of the “Immediacy” of these trades is shown on the table herein. Given this reality – especially in that it has played out year after year – why in the world would I want to hold the hands of trades that refuse to prove their worthiness?

 

Trade Entry date Worst intra-day loss Worst closing loss # of days with closing loss Net
Mpls Wheat 1/5 <-$200 0 0 +195 BPs
Mpls Wheat 6/5 <-$200 0 0 +275 BPs
CAD 6/12 <-$100 0 0 +495 BPs
CAD 6/27 <-$200 -$190 1 +292 BPs
Chi Wheat 6/29 <-$250 0 0 +427 BPs

 

 

Losing Trade 1 - Peter Brandt Factor

 

Losing Trade 2 - Peter Brandt Factor

 

Losing Trade 3 - Peter Brandt Factor

 

Losing Trade 4 - Peter Brandt Factor

 

 

 

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Factor Membership

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Peter Brandt is a 40+ year veteran of trading.  Through his Factor Service, members receive:

checkTrading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
checkWeekend Update: 10-16 pages full of in-depth chart analysis and charting commentary
checkAlerts: Detailed information on specific charts as unique opportunities present themselves
checkMarket Commentaries: Communications on specific topics regarding market speculation and trading distributed periodically
checkWebinars: Monthly member-only webinars where Peter speaks about current conditions and fields member questions
checkKnowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of content
checkAutomatic notifications: Email and social media notifications are sent out when new content is published

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View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

Factor Trading - An Introduction

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