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Can A Trading Strategy With A 50% Win Rate Be Successful
11-15-2014, 05:22 PM
Post: #1
Big Grin Can A Trading Strategy With A 50% Win Rate Be Successful
As everybody in trading knows, failures are a part of the business, and you canat prevent them. If thatas some thing you have trouble taking, then you shouldnat be trading. But, thereas a huge difference between losing big on a regular basis and losing small in a controlled trading plan. You know that you should keep your losses small; the key is always to keep them smaller that your average wins.

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

Allow me to simply take this only a little farther and actually break it down for you: youave lost $200 on your one losing industry, and you then make $600 on your two winning investments ($300 each). Your net profit = $400. Purpose accomplished. Cheap Markus Heitkoetter includes further concerning the inner workings of this viewpoint. Now, STOP TRADING. Usually, youall find yourself giving back you to the amount of money just designed to the markets. Lock in your profits!

Of course, youare not always guaranteed a week with only one loss. Letas look at a week that starts off with three failures. With three losses, you are now down $600 ($200 each). Which means you will need to have three wins that bring about $900 ($300 each). Withhold the $600 you dropped on the losing trades from the $900 you won on the successful trades, and your resulting net profit is $300. Target reached. End trading.

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

YES! Thatas precisely what Iam saying! See the example above again: you lost $600 on three losing trades, built $900 on three winning trades, and came out with a net gain of $300. Which means you can select a losing trade every other time and STILL realize your weekly gain goals!

Because many dealers overlook this essential notion of placing weekly targets, I wish to stress this point again. They determine everyday goals, which produce an enormous mental pressure, and then they deal markets when they shouldnat, and they lose.

So letas just suppose for one minute that you do wind up reaching an actual profitable percentage of only 50%. Now, once you start trading again on Monday morning, what are your odds of having a successful trade? 50%! You have a one in two potential for achieving your weekly profit goal in only one, single trade!

So if you DO obtain your regular gain target on the very first industry Monday morning, what next?

Stop trading for that week! Just enjoy life! It doesnat get much better than that.

Remember, you'll need to stay glued to your trading strategy and your weekly goal. Do NOT enter still another trade when youave already reached your regular goal; the chance your next trade may be a losing trade is too good, and you would be giving your cash and profits back to industry. Over-trading and greediness are a traderas drop, stay glued to your methods and so fight them.

Now, you know that you can achieve your weekly revenue target with a percentage of only 50%. As you improve in your trading functions, you should be in a position to still meet your financial objectives and improve this winning percentage with time..
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