OK, so i apologize if this seems extremly obvious question, but ive been through the FAQ that's pinned to the bottom of the site (I don't know if there another one or not) and haven't really found an answer.

Anyway, my question is, how can i loose to an opponent that's several levels below my pet? I've been using this dragon

http://beastkeeper.com/pet/864416 

and i think she alright as far a battles go, but somehow there always seems like there are one or two opponents she cant defeat, even if there like four levels below her.
Does this have something to do with genetics? None of her genetics are red (is that the correct term?) so i figured those were fine.
Thanks for any help! (and sorry if this is the wrong place to ask)

Level has a pretty small part to do with how well a pet does in battle. Your dragon has all Normal genes, meaning although they don't have any negative effect, they don't have any positive effect either. A pet with good genes (which appear green) is likely to do better. You can take a look at the list of all possible genes here. Plus, a pet with GP gets a stat boost, which can help them do better as well.

Also, part of battling is just luck. If you get countermoved several times by your opponent, you can still lose even with a much better pet. 

Ahh! OK!

Thank you so much!