Built by Traders, for Traders

stock trading instructors traders agency

Why Taking Small Gains and Smaller Losses is So Important

Buying is easy. Selling is hard.

Yet, most investors think the opposite is true.

They think finding the perfect entry point is the “holy grail.”

Spoiler alert: It’s not.

When and where you sell is the single-most important contributor to your success as a trader.

And that applies to both winning and losing trades.

On the downside, it’s simple – work tight stops and keep your losses small.

It doesn’t matter if your trades only work out 40%-50% of the time…

If you are cutting your losses at -10% each time, you can still achieve extraordinary results.

Don’t believe me?

Tale of Two Traders

Take a look at the win/loss table below, which shows the results of two different traders…

Both made 20 trades – 10 winners and 10 losers.

Both traders had a 23% average gain.

And both traders averaged -10% per loss.

But their net returns are drastically different.

The first trader (left column) lost just 2% on nine out of 10 trades but suffered one major loss.

The second trader (right column) lost 10% every time she was wrong.

The net loss is the same.

But the trader who capped her losses at -10% generated a 168% return.

The other one returned just 15%.

The order of the trades is irrelevant.

You can move them around however you want, and the results will be the same.

This should be an eye-opening moment.

Pop Quiz!

Now, let me ask you another question…

What would produce better results?

Making 100% on 10 trades and losing 50% on 10 trades…

Or making 10% on 10 trades and losing 5% on 10 trades?

It’s not a trick question.

Most people think the result would be the same.

But most people are wrong.

The trader with 100% returns on 10 trades and 50% losses on 10 trades broke even.

The trader with 10% returns and 5% losses produced a 55% return.

And which do you think is easier…

Finding 10 trades that make 10%, or finding 10 trades that return 100%?

It’s a no-brainer.

But most folks don’t realize the power of taking small gains and smaller losses.

Nothing Funny About Money

People laugh at 10% winners.

But no one laughs at a 55% annual return.

Those gains compound quickly.

Yes, you’re reading that right.

$20,000 turns into $1,600,836 in just 10 years.

Can you find 10 winners of 10% each year?

Can you set a 5% stop loss?

If so, that’s all you need to build a seven-figure portfolio.

Try It Yourself

Create your own spreadsheet.

Play with your numbers.

You will be blown away at the results you can achieve by simply avoiding any big losses.

You don’t need a slew of triple-digit winners to see huge growth.

Just be disciplined.

Be consistent.

And keep those losses small.

Josh Goes LIVE Today at NOON!

Before I go, I need to invite you to a LIVE special event happening TODAY at 12 p.m. ET

My colleague and expert trader Josh Martinez is set to unveil his brand-new professional-grade system that virtually anyone can use with minimal upfront investments…

We’re talking as low as FIFTY BUCKS!

Look, no one knows the importance of being consistent with your trades more than Josh.

He’s used his brand new strategy to rack up 63 winning trades with a win rate of over 78%… All just since mid-June!

And he’ll explain how he was able to do that during today’s live presentation.

You really won’t want to miss this special session!

Click here to snag your seat for the main event happening TODAY at 12 p.m. ET.

I look forward to seeing you there!

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

Leave a Reply

Your email address will not be published.

TRADING TO THE NEXT LEVEL

Your market analysis is about to get a whole lot simpler.

Subscribe to Beyond the Trade – a free newsletter including Josh’s Weekly Trade Ideas and more!

Upcoming Webinars