As everybody else in trading knows, failures certainly are a part of the business, and you canat prevent them. If thatas something you’ve trouble taking, then you shouldnat be trading. However, thereas a huge difference between losing large on a normal basis and losing small in a controlled trading program. You already know just that you should keep your losses small; the main element is always to keep them smaller that your typical wins.
Letas look at a trading strategy that creates $300 in gains for every gain and costs you $200 for every loss. Visit this page is not affiliated to discover the meaning behind it. Now, if your weekly goal is $300, and if your first business was a lack of $200, then you definitely need to make two winning trades to reach your weekly profit goal.
Let me simply take this just a little farther and really break it down for you: youave lost $200 on your one losing business, and on your two winning positions ($300 each) you then make $600. Your net income = $400. Goal achieved. Today, END TRADING. Otherwise, youall find yourself giving back you to the money just built to the areas. Lock in your profits!
Of course, youare not necessarily guaranteed weekly with only 1 loss. Letas look at per week that starts off with three failures. With three failures, you’re now down $600 ($200 each). So you will need to have three wins that lead to $900 ($300 each). Take the $600 you dropped on the losing trades from the $900 you won on the successful trades, and your resulting net income is $300. Target accomplished. End trading.
Wait a 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 dropped $600 on three dropping trades, made $900 on three winning trades, and came out with a net gain of $300. Which means that you can select a losing trade every other time and STILL achieve your weekly revenue objectives!
Because many merchants ignore this crucial concept of establishing weekly targets, I wish to stress this point again. They define everyday goals, which create a huge psychological stress, and then when they shouldnat they deal markets, and they drop.
Therefore letas only think for a moment that you do wind up achieving an actual winning percentage of only 50%. Now, once you start trading again on Monday morning, what’re your likelihood of having a successful business? 50%! You have a one in two possibility of achieving your weekly profit target in just one, single trade!
So if you DO achieve your weekly income goal on the first industry Monday morning, what next?
End trading for that week! Just enjoy life! It doesnat get any better than that.
Remember, you need to stay glued to your trading strategy and your weekly goal. Don’t come into yet another trade when youave already reached your weekly goal; the possibility that your second trade may be a losing trade is too good, and you’d be giving your hard earned money and profits back again to the market. Over-trading and greediness really are a traderas fall, stay glued to your techniques and so fight them.
Now, you understand that you is capable of your weekly income goal with a percentage of only 50%. You should be able to still meet your financial goals and improve this winning percentage over time, as you improve in your trading functions..