Why Good Ideas Still Lose Money

Being right on direction is not the same as making money. Futures trading punishes late entries, bad sizing, and rule violations even when the original idea is fine.

1. Entering Late After The Move Has Started

A common pattern:

• You see a clear trend.
• You hesitate until price has already moved a long way.
• You finally enter right before a normal pullback.

The overall idea (trend up or down) is correct, but your entry is at the worst part of the move. The pullback tags your stop, you’re out, and then the market continues in your direction without you.

2. Slippage And The Spread

Futures contracts have a bid and ask. Market orders hit the ask when buying and the bid when selling.

In fast markets:

• Your order can fill multiple ticks away from the price you saw.
• Stops can slip past the level you picked.

On small targets, a couple of ticks of slippage can turn a good idea into a scratch or a loss.

3. Stops That Are Too Tight

If the stop is placed inside normal noise, price will hit it even on good ideas.

• Stop 3–4 ticks away on a product that normally swings 10–15 ticks in a wiggle.
• Stop placed exactly at obvious levels everyone else uses.

The trade gets stopped out, the level holds, and the market runs in your direction after you’re flat.

4. Oversizing Relative To Drawdown Limits

In a prop eval or small account, size multiplies the impact of normal volatility.

• Two or three normal losing trades can hit the daily loss limit.
• Trailing drawdown can be triggered on a standard pullback.

The idea is still fine. The account can’t survive the size.

5. Taking Profits Too Early

Good direction, but:

• Exiting at the first small move in your favor.
• Cutting winners at 1R while losers run past 1R.

Over a sample of trades, this skews the math: the win rate looks good, but the average win size is too small to cover normal losses and costs.

6. Breaking Your Own Risk Rules Mid-Trade

Examples:

• Moving the stop further away once price gets close.
• Adding contracts to a losing position.
• Refusing to close when your daily loss limit is hit.

Now the problem is no longer the idea. It’s the behavior during the trade.

7. Platform And Order Mistakes

Things that turn a correct read into a loss:

• Wrong quantity in the order ticket.
• Buying when you meant to sell.
• Bracket not attached, so there’s no stop.

None of that has anything to do with analysis. It’s pure execution error.

8. News Spikes Against An Otherwise Good Idea

Scheduled news (CPI, FOMC, jobs data) can temporarily blow through levels that would normally hold.

If your idea ignores the news calendar, you can be right on the general direction but wrong on the timing and get taken out by a single spike.

9. Prop Firm Rule Conflicts

In an evaluation, you can have:

• Correct direction.
• Positive equity.
• A trade that would work out over time.

and still fail the account because:

• You hit the daily loss limit during a drawdown.
• You violated the trailing drawdown.
• You traded during a restricted news window.

The firm doesn’t grade the idea. It grades rule compliance.

The Real Lesson

“Good idea” is only step one. Between the idea and the end of the trade, you have:

• Entry timing
• Order type and slippage
• Stop placement and sizing
• Behavior during the trade
• External rules (broker, prop firm)

Any weak link in that chain is enough to turn a correct read into a losing trade.