Dear Fellow Traders, Everyone related to Stock Market is always focused on the goal of how much they can make buying/selling a stock, they forget to concern themselves with how much they risk loosing. Is it true that âThe secret to great wealth in the stock market, is not big gains; its small lossesâ Is this a strategy of keeping losses small? If we will win only 1 out of 3 times with our losers loosing 5% and our winners gaining 25% we can make extremely large profits. Thatâs do the math assuming that there is only 1 out of 3 winners. So if we make 9 trades of USD10,000 each in one month it means we will loose money on 6 and make money only 3. the 6 losers will cost us USD3000 (6*5% loss on each of USD 10,000 Trades) and the 3 winners will net us USD75000 (3*25% gain on each of USD 10,000 Trades) for a profit of USD 4,500 Regards Mark
what a breakthrough it is shame the guys at the swedish academy have already announced the economics prize winners for this year
LOL It certainly would be a breakthrough when 75% of 10k is $75000, sounds like wise-guy loan shark math to me!
Effective method, if only it could be put on tracks easily... Jesse Livermore, in his famous Reminiscences of a Stock Operator, hammered this point (of cutting losses and letting winners ride) half a century ago..I think...But even he could not walk his talk for long; lost and regained his fortunes twice, lost again.. and eventually attained peace by putting a gun to his head.
little do most know..but M4 has touched on the ultimate money making machine..and all he needs now is to fine tune the instrument so that the music is as sweet as it can be so M4..what is it u are trying to get out here..are u searching or giving? u must be more specific..either way..for if u are searching u can only be helped by being very exact..and if u are giving..then u need to do noting more..as those who seek will make it their business to find out..by asking the correct way..which is very very few..btw
The key is to know when to cut your loss so as to minimize the odds of being whipsawed. In that regard simple technical analysis, and your experience, is a great help.
How many of the same threads do we need? http://www.elitetrader.com/vb/showthread.php?s=&threadid=179062&perpage=6&pagenumber=1
well piezoe..what if..instead of cutting your losses to avoid whipsaws..you perfect your entries..so that..when you enter a trade the chances of you getting whipsawed are much much less.. is this not a better way to keep your losses small and make your winners greater than your losers?