Well said shizo. Before taking a trade you must do your homework. Planning the trade is important. Very important. You must know where the pair in question is heading & how far it will go before the next retracement. You must also know how far the trade may go against you before heading off to your target. After all timing a trade entry to perfection is impossible in most instances. Also the target must always be greater than your SL. Even a 50% win rate will make you profitable with this plan. Don't be too ambitious (greedy). Set your TP for the easy target.
True People think any business needs money first. Actually money is the last one needed. Top to down priorities in business/trading are: 1. Passion/interest 2. Effort/Time 3. Patience 4. Insight 5. Intuition 6. Money... Either ours or borrowed doesnt matter
There are some myths around succes rate and risk reward ratio. The facts are 1. 50% win rate is actually gambling 2. Professional traders use only edge based strat which gives high win rate 3. 1:1 RR ratio is not bad idea considering the price swings to avoid hit by stoploss Most importantly strats must have well defined and comprehensive entry/exit rules to handle noises and utilise the edge to the max
It's when you (so often) use these dogmatic words like "only" and "always" and "must" that you lose all your credibility. That's just untrue. It's wrong. If you had any real background in professional trading, or knew anything much about it, you'd appreciate that many professional traders actually have fairly low win-rates with very high R multiples.
This approach wont allow traders to scale up their investment and they have to stick to fixed investment which is bearable for loss. On the other hand a professional trader's strat have scope for scalability of invedtment. Without scalabity we cant classify it as a business or professional trading. Maybe label it as hobby.
because without a working method winning for the wannabe-traders is a lucky breakthrough , but loosing is a given as the consistent pattern
Why do traders lose more money on their losing trades than they make on their winning trades? They don't, only people who think they are traders lose more than they win.