The concept of deserving a loss isn’t a pleasant one to discuss, for a couple of reasons.
The most obvious is; we do not enjoy losing money. This reason is obvious, almost goes unspoken – but it’s true. The second, and less obvious reason is; we all have an ego that says ‘No, you only deserve the best of the best and never “deserve” to lose money.’. This reason perhaps is often overlooked when it comes to us (as human beings), but it is unquestionably true when it comes to analyzing a loss (of any sort).
So, this begs the question: When do we deserve a loss? We will of course answer this question, with another question: Do we ever not deserve a loss? Or to word it differently, is there ever point in which we deserve a win?
The answer to the last question there is simply, no. We never deserve a win – the market owes us nothing, at all. This is a difficult thing to wrap your head around because at the end of the day, that is the only reason why we are in the market – to make money and it logically does not make sense to be in a business that never owes us money. But there in lies the paradoxically difficulty of being a market participant: We work so hard to make money with something that never does a thing for us, and never owes us a penny.
Let’s wrap this up.
This being said, we can deserve a loss, at least in a figure of speech sort of way – not literally in terms if dollars. The way we deserve a loss is if we fail to implement our process, rules and discipline when it comes to taking a trade. If we fail to do these things, we fail ourselves, thus, even if it still wins – we should/deserve the loss for not following our process that we (ourselves) laid out to protect us.