Good morning, Traders!
I hope you enjoyed your weekend! As we prepare for another week of trading, I’d like to share some of my thoughts on how to apply a tried-and-true development strategy.
This method, if used correctly, will aid in the growth of your trading account! While you won’t win every transaction, you can make sure that your winnings are greater than your losses.
You may obtain a better understanding of your success by breaking down your trading patterns into blocks. You can use this method to determine your win/loss ratio for future trades as well. That’s an important step in becoming a successful futures trader!
But how does it work? Keep reading to find out!
The Proper Formula
Trading is never viewed as simply one, two, three, or four trades. For you to have a better understanding of how the formula works, we’ll call ten trades “one block”. Keep in mind that you should always set a minimum of a 10-trade block to increase your chances of success. Placing ten or more trades will help you generate more profit.
To learn more about how we profit from futures contracts, read my free article here.
Here’s the scenario: If you’re winning $100 a time, that would be a total of $600 in winnings and $400 in losses. If you win half and half, you’ll break even. If you lose six trades and win four trades, you lose $200. Knowing that this could happen, you can adjust the amount of trade you put in to gain more profit.
The Value of Risk vs Reward
Say that you see you’re going to win double the amount that you lose, or you’re trying to win $200 per trade. By fielding six trades, you’ll get $1,200. With the formula mentioned above, all you have to do is double, triple, quadruple, or add more to your initial trade to win more profit in the end. So, for six trades, you might get $1,200, but you’ll lose $400. All in all, you’ll end up with a net gain of $800 for every ten trades.
For a full picture of how futures trading actually works, be sure to check out this bonus article I wrote!
The Bottom Line
First, you’ll need a strategy. You have to know how to find direction, where you need to enter the market, where to place your stops and limits, and more importantly, how to have fun while doing so.
Let’s say that for every 10 trades you place, you make $1000, and that is one trading block. In order for you to get that first $5,000, you have to do it five times, and you have to trade five blocks.
And that’s the core of my formula. With this information, you’re ready to start plotting a course to trading success! But don’t do it alone. I’m here to offer my knowledge and experience you help you get there!
Keep On Trading,