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Define Your Trading Goals
11-15-2014, 05:21 PM
Post: #1
Big Grin Define Your Trading Goals
As everybody else in trading knows, losses are a area of the business, and you canat prevent them. If thatas something you've trouble accepting, then you shouldnat be trading. Nevertheless, thereas an enormous difference between losing big on a regular basis and losing small in a controlled trading approach. You know that you should keep your losses small; the main element is always to keep them smaller that your typical benefits.

Letas look at a trading strategy that creates $300 in gains for every gain and charges $200 to you for every loss. Now, if your weekly goal is $300, and if your first trade was a loss of $200, then you have to make two winning trades to attain your weekly income goal.

I want to simply take this only a little farther and actually break it down for you: youave dropped $200 on your one losing trade, and then you definitely make $600 on your two winning investments ($300 each). Your net income = $400. Goal accomplished. Now, STOP TRADING. Normally, youall end up giving back the money you just made to the areas. Lock in your profits!

Of course, youare not always guaranteed a week with just one loss. Letas look at weekly that begins with three failures. With three losses, you are now down $600 ($200 each). Which means you would want to have three wins that end in $900 ($300 each). Take the $600 you lost on the losing trades from the $900 you won on the successful trades, and your resulting net gain is $300. Goal accomplished. End trading. Click here rockwell trading to discover the reason for it.

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

YES! Thatas exactly what Iam saying! Read the example above again: you lost $600 on three dropping trades, built $900 on three winning trades, and arrived with a net profit of $300. Which means you might choose a losing trade every other time and STILL realize your regular revenue objectives!

I want to stress this point again, because many investors overlook this important idea of placing weekly goals. They define daily goals, which produce a huge emotional pressure, and then they trade markets when they shouldnat, and they lose.

So letas just suppose for a moment that you do end up achieving a real winning percentage of only 50%. Now, whenever you start trading again on Monday morning, what are your odds of having a profitable business? 50%! You have a one in two potential for achieving your regular profit target in only one, single trade!

So if you DO realize your weekly income purpose on the initial trade Monday morning, what next?

End trading for that week! Just enjoy life! It doesnat get any better than that.

Remember, you'll need to stick to your weekly goal and your trading strategy. Don't enter into still another trade once youave already achieved your regular goal; the possibility that your next trade might be a losing trade is too great, and you'd be giving your cash and profits back to the market. Over-trading and greediness certainly are a traderas fall, stay glued to your techniques and so resist them.

Now, you understand that you can perform your weekly profit purpose with a percentage of only 50%. As you improve in your trading functions, you must be able to still meet your financial objectives and improve this winning percentage over time..
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