Forex Swing Trading Strategies: Capturing Profits In Los Angeles

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Forex Swing Trading Strategies: Capturing Profits In Los Angeles – Finding the win rate, risk/reward, and profitability balance doesn’t matter if you don’t consider your risk/reward in how many traders win.

Profitable and consistent trading is all about finding a balance between your win rate and your risk/reward ratio. Here’s how to do it.

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

The win-rate is how many trades have won and is usually given as a percentage. Like 50%, 5 out of 10 trades will win, or 50 out of 100 trades will win. That means 50% of the trading results will be kept in profit.

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Win rate is what most people focus on. They usually want to be right! However, Reward:Risk (R:R) is also important. R: R is how much a trader wins on a winning trade and how much he loses on a losing trade.

If you have $100 – that’s what you lose when you take a loss – but if you have $500 on your winnings, you can have a lower win rate and still make money because your profitable trades are much bigger than your losses.

If you lose $1,000 when you lose, but only make $150 when you win, it will be impossible to increase your account over time because you need to win 9 out of 10 trades to make a profit.

I use the reward:risk (instead of the more commonly used risk/reward) so that we can work with real numbers. You can say 2:1, 1.5:1, 3:1 etc., or your reward is 3x your risk in the latter case. Risk/reward is another term used, and it means the same thing, except you’re using that fraction. If your reward is 3x your risk, the risk/reward is 1/3, or 0.3333. Reward: I prefer to use risk.

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I determine my entry, stop loss and profit target on each trade. This presents my estimated reward: for business risk.

In most trades, I end up with average R:R and average win-rate. These are the averages that matter over time…based on closed trades.

20:1 R:R If you try to trade every time, but the price never hits your target, you will end up with huge losses and non-existent rewards. You have to be able to actually lock in those rewards for it to matter.

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

Every trade is important – we need to execute as many as we can – but we also want to think about how the strategy works across multiple trades.

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Interested in day trading stocks? Learn how and when to capitalize on price patterns that occur multiple times a day in stocks. In the Price Action Stock Day Trading Course, learn the correct patterns to look at for risk/reward opportunities.

Many people think that they need to accurately predict where the market will make money. It’s not true.

Think of marketing as accounting. Win-rate and reward: By using risk, you can determine the balance between the two that you need to be profitable.

Profits can come regardless of how many losses you have, assuming your wins are big enough to make up for it. Losses can be debilitating if you want to be right all the time, but if your goal is to make money, losses are part of trading.

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With a $20K account you can earn $6K per month with a 33% win rate and a 5:1 payout. All you need to do is make 30 transactions on a $20,000 account. Based on statistics, you are going to lose $200 of capital out of every 20 trades you place. That means you are risking 1% of the account per trade. Your average profit on the other 10 trades is $1,000 (5:1 risk). These wins and losses are randomly sprinkled throughout the month. Marketing also doesn’t take much time, so the job only requires a few hours a week.

If you want a higher income, you can always trade more capital on your way after proving yourself.

It looks very simple when put in this form. Trust only the average based numbers for a strategy. Each strategy provides different statistics over the past several hundred trades.

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

Once we start a business, we think, “If I can cut some of those losses, I’ll make more money.” Or “I don’t want to lose on the trade so I don’t take trades that I think are likely to be losers.” Or “I lost 4 transactions in a row. I can’t handle another potential loss. I am sitting on the next business. ” We are forgetting that we have to take those losing trades to get our monthly profit. And we part ways. We need those 20 losses to find 10 winners that will give us good returns. You can’t have one without the other.

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The example is to show that even with a low win rate, big returns are possible. This trader only wins 33% of their trades but is making a good monthly return.

Another trader can earn $6K per month on a $20K account differently. You win 60% and risk the prize 2.5:1 over 30 trades. (This is the reward: risk I discuss in the EURUSD day trading course)

Statistics can be changed in many ways to provide different scenarios. One way is not better than the other, but if you have a low win rate you need a higher reward:risk, and if you have a higher rate you can avoid a lower reward:risk.

The high win rate and low reward for risk seems to appeal to many people, because it seems easy and less emotional to get more wins, even if they are small.

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But make no mistake, it is not easy. Winning 60% of transactions with 1:1 R:R or more is actually pretty neat air. Most traders, even successful ones, win less than 50%.

And the people who see them say they win 90% of their business… they often end up losing their accounts because they make little profit.

Trying to win a lot of trades is as difficult as dealing with more losses for a few big winners that make a total profit. That said, a certain combination is best for you. Find out what you feel most comfortable with. Go with what you feel (less stressed, more confident, etc.) in real transactions, not what you think you’d prefer.

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

Risk/reward and win rate can easily be tracked with software or by recording your trades in an Excel trade journal.

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If day trading is more your thing, check out the EURUSD Day Trading Course for multiple daily risk opportunities in the forex or futures market for ways to take advantage of the great rewards.

One of the biggest problems faced by some traders is keeping the trade up to the target regardless of the trade. The more obvious the problem tends to be, the greater the reward: it’s a risk. Keeping the business up to the 10:1 target can be difficult for some people (but very exciting and fun for others).

People who struggle to hold profitable trades tend to jump ship before the target is reached. Once the business is showing profitability, they are afraid of losing their small profits. So you close a business with a small profit and lose a big potential. But if you take all the losses and cut your profits early, your earnings will evaporate. If you cut profits

Loses faster, then you’re probably fine, as long as your wins are bigger than your losses on average. But why not start with small stop losses and targets?

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Think about what kind of businessman you are. Do you wish you could just sit back and watch big winning deals unfold? Or do you prefer to collect small profits more often? One is not better than the other, but going against your nature is wrong and will lead to frustration and possibly failure. Know yourself and then strategize around it.

Another thing to consider is that in order to hold profitable trades, you must have a losing trade. Profitable trades are worth more than losing trades (assuming a higher 1:1 reward:risk ratio) If you start trying to “jump” trades and accidentally skip a winning one, that will really hurt. You give up $800 to avoid a $400 loss (5:1) or $800 to avoid a $400 loss (2:1)!

Trying to avoid losses can be the biggest problem for many traders. We lose clutter in our head and capital, so there is a strong incentive to get rid of them. Let me try to fix that problem for you with an analogy:

Forex Swing Trading Strategies: Capturing Profits In Los Angeles

I hired you to implement my strategy for me. I will give you all the rules and all you have to do is follow them. You don’t trade. You are following my instructions/strategies similar to putting together Ikea furniture. If you follow the rules, I will pay you $10,000 a month.

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The maximum I will pay you to implement my strategy is $10,000, because that

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