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Can A Trading Strategy With A 50% Win Rate Achieve Success
09-12-2014, 02:52 PM
Post: #1
Big Grin Can A Trading Strategy With A 50% Win Rate Achieve Success
As everybody in trading knows, deficits really are a part of the company, and you canat avoid them. If thatas some thing you've difficulty accepting, then you shouldnat be trading. But, thereas a massive difference between losing large on a normal basis and losing small in a controlled trading plan. You know that you must keep your losses small; the main element is to keep them smaller that your average benefits.

Letas look at a trading strategy that creates $300 in earnings for every gain and charges you $200 for every loss. Now, if your weekly goal is $300, and if your first business was a loss of $200, you then need certainly to make two winning trades to reach your weekly income goal.

I want to simply take this only a little further and actually break it down for you: youave lost $200 on your one losing trade, and then you definitely make $600 on your two winning trades ($300 each). Your net income = $400. Target accomplished. Today, END TRADING. Otherwise, youall find yourself giving back the amount of money you just made to the markets. Lock in your earnings!

Of course, youare not necessarily guaranteed a week with only 1 loss. Letas look at weekly that starts off with three failures. With three failures, you are now down $600 ($200 each). So you would want to possess three wins that end in $900 ($300 each). Navigating To homepage likely provides suggestions you could give to your boss. Take the $600 you lost on the losing trades from the $900 you won on the successful trades, and your resulting net gain is $300. Purpose accomplished. End trading.

Wait one minute a youare saying that I'll achieve my aims with a percentage of only 50%?a

YES! Thatas just what Iam saying! See the example above again: you lost $600 on three dropping trades, built $900 on three winning trades, and arrived with a net profit of $300. Which means that you could select a losing trade every other time and STILL accomplish your regular revenue objectives!

I want to stress this point again, because many investors ignore this important notion of establishing weekly goals. They define everyday goals, which produce a huge mental stress, and then markets are traded by them when they shouldnat, and they drop.

Therefore letas only assume for a minute that you do end up achieving a real winning percentage of only 50%. Now, when you start trading again on Monday morning, what're your likelihood of having a profitable business? 50%! You have a one in two chance of achieving your regular profit goal in just one, single trade!

So if you DO realize your regular gain purpose on the initial industry Monday morning, what next?

End trading for that week! Just enjoy life! It doesnat get any benefit than that.

Remember, you will need to adhere to your trading plan and your weekly goal. Don't enter yet another trade once youave already accomplished your regular goal; the chance your second trade might be a losing trade is too great, and you would be giving your hard earned money and profits back again to the marketplace. Over-trading and greediness certainly are a traderas drop, so avoid them and stick to your methods.

Now, you know that you is capable of your weekly income goal with a percentage of only 50%. You should be able to still meet your financial objectives and improve this winning percentage as time passes, as you improve in your trading functions..
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