Saturday, October 9, 2010

Cut Your Losses and Let Your Profits

Did you know that many successful traders win less than 50% of their profession? Yes, top traders know that they can be very successful victory, only 40% of the time.
How is that possible? ¡± you have to ask. Just, no. They are really old proverb about ¡° Cut your losses and let your profits Run. See how this could work.

Imagine that the stock and hits your stop to 98% from your entry price, which gives you a loss. Select another fund, and once it hits your stop loss, other 2% Ding to your account. The third point ¡¯ With your charm and a profit margin of 15% a year ago and once again increase your end-stop to 10% above your entry price. In other words, you have to do 10%.

In this case, you have two losers and one winner for the win / loss percentage of 33%, but you have about 6%. If you let your profits run and cut your losses short.
It's not easy, with more losers than winners, because they can easily find themselves at 5, 10 or even 20 lines of losses in a row. But these figures are misleading, as any loss is very small.

Think in terms of baseball. A player may have only just live batting average and a great player, if hit the home run, when, finally, allows the ball.

It takes belief in yourself as a trader working stock trading system that wins less than half the time. It ¡¯ is not easy to be wrong most of the time. But this is why the market rewards such a strategy, so high, if done correctly.

In other words, Don't T release management system, because it has more losers than winners. So long as it is obtained, on average, significantly higher than the average loss can be very successful with this system in the long term.

So keep in mind as you look around for the right strategy for you. Many small loss, as well as several big winners could be much more profitable, then many small winners, and a few large losses, that's all back and then some.

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