In this post about adding COIN to my growth stocks positions I described how I trade growth stocks. But lately I got stopped out fast from many positions I opened. Today’s market is sentiment driven rotation so far (out of tech stocks to defensive stock). This is possibly due to expectations about bad data coming at the end of this week.

So I realized, I had the right tool protecting me from large losses but I didn’t have the right tool for entry. Evidently, the screener itself is not enough.

 

As you can see in the above table, I got stopped out of almost all trades but five and closed one on a target date for a profit.

This is a time to re-evaluate and tweak the strategy. So I sat down thinking what was I doing wrong that I got stopped out so quickly and what can I do to improve it and avoid being killed by “thousand cuts.”

Then I realized that what I was experiencing was a regime mismatch + correct risk control doing its job.

 

A high stop-out rate does NOT mean the system is wrong.

 

In fact, most robust systems have low win rates:

• 30–45% wins is common
• sometimes even lower in difficult regimes

What matters is:

• loss size control
• asymmetry when winners occur
• survivability until regime improves

Right now, my system is clearly doing risk containment, not profit generation, and that’s exactly what it should do in a hostile environment. And today’s market is clearly a hostile environment, otherwise I wouldn’t be stopped out so fast. And the evidence of containment is clear = just 8.74% loss that could easily be 15% or 20% if let go without management.

 

How to fix entries?

 

Well, this is a well known rule written by many great traders. They just didn’t occur to me. Trade bullish trades when the market is bullish. Easy, right?

So I added one more rule:

Open a new trade only when the market’s volume delta is positive. Not negative! Right now, the Delta Volume is -12.80% (and in fact the overnight trading worsened it to -13.09% so even if my AI screener shows a good buy candidate, I will only buy if the delta is positive.

Happy Trading!

 

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