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Understanding the losing sales pitch!
There are many different ways of trading. One of the sales pitches
pushed often, is that percent of losing trades to winning trades. This
can be very confusing to a novice beginner. Be aware, that in any
system
that touts a percentage of losing trades, what is not expressed, is that
such a system will only work, if you have a method of letting your
profits run on a regular basis. If there is no method of letting
profits
run, or your target commodity or product does not trend enough to let
profits run. Most systems with any losing trades will not work at all.
On the other hand, you should more concentrate on timing and lesser
trades to reduce that magical losing trades percentage. While we can
not
help getting burned with a losing trade once in a while. In order to
work successfully in trading for most systems. Not all, just most, you
have to concentrate on not taking dubious trades. Not taking a
questionable trade is in itself a position. It is more important in any
trading system to cut your losing trades. Very few markets lend
themselves to accepting losing trades as a huge percentage and allow you
to come out ahead without the accompanying miracle of getting on a trend
that lets you allow the profit to run. Pyschology being what it is and
a
novice with little experience, this is unlikely for a novice to be able
to let a profit run. Therefore it behooves one to trade in such a way,
that you do more careful trades and try not to enter any trade that has
a
probability of losing. The losers will kill you otherwise. So take
the
system and method hype with a touch of salt. You really want 90%
winners
or better, for a novice. That means few trades.
--
by Ray Auxillou
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