trading

trading

Wednesday 7 September 2011

It does help to have a probability mindset.

Look at the formula bellow:

(AVG $ Win X WinRate) - (AVG $ Loss X LossRate) = Positive Result

Let's have a look behind the formula:
We derive the AVG $Win by dividing the positive '$' results
by the number of winning trades.
We derive the WinRate by dividing the number of winning
trades by the total number of trades.
We derive the AVG $ Loss by dividing the negative '$' results
by the number of losing trades.
We derive the Loss Rate by dividing the number of losing
trades by the total number of trades.

If we consider the formula, we shall find all the elements of a probability mindset The first thing to notice is that you determine success or failure over the long-term rather than on the result of any one trade. Focus on achieving consistent long-term results. You do not live or die on any single trade. Focus on achieving a robust decision-making process. Take advantage of market conditions by all means, but never confuse being good with being lucky

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