Clipper Ship Trades: Random Distribution of Wins and Losses

Friday, August 9, 2013

Random Distribution of Wins and Losses

Here is another link I found that expresses excellently the idea of random distribution of trading wins and losses and why it is important to risk small:

http://www.learntotradethemarket.com/forex-articles/the-one-fact-about-trading-you-need-to-know-now

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

My Trading Approach

Risk management is paramount. I risk 1% (defined here as R) of my trading capital on any ONE trading idea (It could be anything, really! For instance, maybe, I dreamt of a rotten apple, so I find some instrument that allows me to short AAPL ). I use stop losses to limit my risk to 1%.
The trend is my friend, so one of the first things I do is determine the primary trend and stick to it.
My approach is to buy near support preferably after it shows signs of rebounding. Similarly, I short near resistance preferably after it shows signs of falling. Sometimes I go for breakout setups with specific stocks.
I go for a reward/risk of at least 3:1 in my favour. Otherwise, I do not take the trade.