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Can A Trading Strategy With A 50% Win Rate Become Successful
09-09-2014, 06:25 AM
Post: #1
Big Grin Can A Trading Strategy With A 50% Win Rate Become Successful
As everyone in trading knows, losses are a area of the business, and you canat prevent them. If thatas something you've difficulty taking, then you shouldnat be trading. Nevertheless, thereas a massive difference between losing major on an everyday basis and losing small in a controlled trading approach. You already know that you should keep your losses small; the key would be to keep them smaller that your average wins.

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

I would like to just take this only a little farther and actually break it down for you: youave lost $200 on your one losing trade, and on your two earning investments ($300 each) you then make $600. Your net income = $400. Target reached. Now, STOP TRADING. Usually, youall find yourself giving back you to the amount of money just designed to the areas. Lock in your profits!

Of course, youare not at all times guaranteed a week with only 1 loss. Discover more on this affiliated portfolio by visiting rockwell trading. Letas look at weekly that begins with three losses. With three failures, you are now down $600 ($200 each). Which means you would require to possess three wins that end in $900 ($300 each). Take the $600 you lost on the losing trades from the $900 you won on the winning trades, and your resulting net profit is $300. Purpose reached. End trading.

Wait a moment a youare saying that I will achieve my goals with a percentage of only 50%?a

YES! Thatas exactly what Iam saying! Read the example above again: you dropped $600 on three losing trades, built $900 on three winning trades, and came out with a net profit of $300. This means that you could select a losing business every other time and STILL achieve your weekly gain objectives!

I do want to stress this point again, because many traders neglect this essential concept of setting weekly goals. They determine daily objectives, which produce an enormous emotional stress, and then when they shouldnat they trade areas, and they drop.

So letas just think for a minute that you do end up achieving a genuine winning percentage of only 50%. Now, once you begin trading again on Monday morning, what are your likelihood of having a successful business? 50%! You have a one in two potential for meeting your regular profit goal in just one, single trade!

So if you DO realize your weekly revenue goal on the first business Monday morning, what next?

Stop trading for that week! Just take it easy! It doesnat get any better than that.

Remember, you will need to adhere to your trading strategy and your weekly goal. Do NOT enter into yet another trade after youave already accomplished your regular goal; the chance your next trade might be a losing trade is too great, and you would be giving your cash and profits back to the marketplace. Over-trading and greediness really are a traderas fall, stay glued to your techniques and so resist them.

Now, you know that you is capable of your weekly gain target with a percentage of only 50%. As you improve in your trading functions, you ought to be able to still meet your financial goals and improve this winning percentage as time passes..
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