May 23, 2024
this article explaing how one can become an expert in managing losing trades in stock market, using price action and easy sell rules

Managing Losing Trades – Nov-2023 – March 2024 SERIES

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Dear all. “Managing losing trades” is one of the under rated topic in trading.

How much money you make in a trade is irrelevant if you don’t concentrate on managing your positions. I am publishing all my losing trades as a journal in this article. The trades are taken between Nov 2023 to March 2024. The last position was exited in 2nd week of march. Just go through all these trades and see how I exited the stocks to prevent myself from getting down into severe drawdowns. The most common mistake I found is most of the positions I built from FEB and March failed while the trades I took in early November, December were profitable ones.

You can refer my winning trades here: WINNING TRADE SERIES. This signifies why one should be aware of the market conditions before initiating new positions. Though there were many failed trades I was able to end the cycle with positive returns only because of the strict exit rules and proper position sizing.

The trades below are presented in GOOGLE SLIDES Format. It saves time and doesn’t slows up my blog’s speed. You can see a pointer with slide number at the left bottom of the slide. Just click on the > arrow button to move to next slide. You can choose from the three dot button to view the trade in full screen also. If you are facing any issues kindly let me know:

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TRIDENT TRADE – FEB 2024

ADVENZYMES – FEB 2024

AEGISCHEM – FEB 2024

TIME TECHNOPLAST – FEB-MARCH-2024

This trade is different. While most of the above trades I was very convincing to sell off, this stock I was not ready to sell off. Because the stock was still strong and it just breached 50 DMA. No volume rise was seen. But still exited the stock to protect my overall gain and I had to take care of my Portfolio also.

In hindsight, if I had held this trade it would have given me 40% profit as of today (April 9-2024) but if it has gone wrong then it would have hampered my overall performance. So exited the trade as soon it met my sell criteria. Also at that point of time SMALL CAP index was beaten up and it breached 50 DMA Decisively.

RAIN – FEB – MARCH 2024

BORORENEW – MARCH 2024

One thing I noted in both the RAIN and BORERENEW (Borosil Renewables) were that the recent quarters were not great and also the stock was not trading near to all time highs. I prefer trading stocks only near to ATH zones. This was a violation on my part and was too optimistic about the chart pattern.

However, the only good thing I did was I entered only with pilot positions in these names and exited as soon as the sell rules met. This is the only way you can protect your gains you made, when the market is on your side.

DATA PATTERNS – FEB – MARCH -2024

I usually keep tracking my past winners and enter again in them if it gives me a good entry. Data Patterns was one such stock. Refer my previous trade here.

The stock performed everything right from entry point. However, when the small-cap index fell, the stock had a free fall which I didn’t like. So exited the stock.

The stock is still in good structure and can run again.

Key Takeaways:

Having a good exit rule is extremely important for managing losing trades.

Positions should be built in the early stages of bull run or immediately after the fall and care should be taken when building positions in late phase of bull run.

When the broader market is too heated up, await for correction before initiating new positions.

Position sizing is the key. Even though you enter at the wrong market timing, you can still be saved and make money if you have a robust position sizing rules and exit rules. Use my free POSITION SIZNING CALCULATOR to know how much of stock you can buy at a given time.

DISCLAIMER – Kindly understand that there are “N” number of ways to trade. My entry, position building techniques, and exits can be done differently by different traders. For some it may look like a late entry, while some may think that I exited too soon. It all depends upon the psychological makeup and the risk profile of the trader. 

So, if some points seem to be irrelevant or if you think that it could have been done the other way around, I agree with you completely. It’s just that, this is how I trade and my trading style may change in future as I evolve as a trader. 

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