asiaforexmentor
Posts: 50
Join date: 2011-03-28
Location: Singapore
 |  Subject: What’s your winning probability? Mon Dec 19, 2011 9:06 am | |
| Forex Coach Ezekiel Chew ask: What’s your winning probability?
FOREX COACH Ezekiel Chew ask: What’s your Winning Probability?
Do you have the answer to this question?
If you don’t, then probably you should NOT even trade.
It is a very simple question that you should ask yourself before you take every trade.
“WHAT IS MY WINNING PROBABILITY FOR THIS TRADE? “
If it is anything lesser than 60%, skip the trade.
You see it makes no sense at all for you to take a trade that has lesser than a 60% chance of winning.
If it’s lesser than a 50% chance of winning, why even trade?
You are bound to lose on that trade right?
If it is a 50% chance of winning. You are betting on your luck.
That’s gambling, that is NOT trading.
If it is a 60% or higher chance of winning. And if you only take trades that have a 60% or higher chance of winning.
Where do you think your account size will go? UP of course.
Forex Coach Ezekiel Chew ask: What’s your winning probability?
Having a 60% and higher winning probability for that trade means you have an edge over the market.
You SHOULD consistently take trades that are over 60% chance of winning.
But if on occasions where you take a trade that is a 50% chance of winning.
You will spoil your entire game and your entire trading plan.
That is because you are adding a random variable to your trades.
And these random variables will disrupt your account growth.
For example:
Trader A) Out of 20 trades, he take trades that are only 60% or higher winning probability.
Trader B) Out of 20 trades, he takes 10 trades that are of 60% or higher winning probability and 10 trades of lesser than 60% winning probability.
Trader C) Out of 20 trades, he doesn’t care about the winning probability. He just take trades when he likes it or just based on his gut feel.
Forex Coach Ezekiel Chew ask: What’s your winning probability?
Which trader do you think has a better chance of growing his forex account?
Trader A of course!
Which trader trades most like you?
If you are at trader B or trader C stage, you should stop your trading now.
And reflect on this.
This vital question is something that you must ask yourself the next time you trade.
“What is my winning probability for this trade?”
Forex Coach: Ezekiel Chew
Asia #1 Forex Mentor
www.asiaforexmentor.com |
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FX_loser
Posts: 32
Join date: 2011-06-19
| | Subject: Forex winners Thu Dec 22, 2011 10:04 pm | |
| The percentage of winners in Forex is a mystery. Nobody knows it for sure. There is a theory that 50% of traders win since Forex is a zero sum game. In other words for every dollar earned on FX someone else losses a dollar. So on average, there's no profit. This is different from say, the stock market, where the average person can hold a package of stocks that appreciates over time.
Read also
http://www.forexsure.net/products/is-forex-for-you-/78-forex-winners.html |
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Sauros
Posts: 502
Join date: 2009-05-14
Age: 37
Location: London
| | Subject: Re: What’s your winning probability? Thu Dec 22, 2011 11:26 pm | |
| | FX_loser wrote: | The percentage of winners in Forex is a mystery. Nobody knows it for sure. There is a theory that 50% of traders win since Forex is a zero sum game. In other words for every dollar earned on FX someone else losses a dollar. So on average, there's no profit. This is different from say, the stock market, where the average person can hold a package of stocks that appreciates over time.
Read also
http://www.forexsure.net/products/is-forex-for-you-/78-forex-winners.html |
I tend to agree on one thing with you, FX_loser : no one have a clue what the expectancy of his/her own system is, needless to say the probability for a trade to be a winner, even after 1,000 trades of the same set up and 50 years of backtest because the markets constantly change. On the other hand I disagree on the 50%. As mentioned in your link (nice post), I guess 10% of the guys take 90% of the money and that may seem strange but those 10% have something only like 30%-40% of profitable deals. Here's the thing and it's discussed in Van K Tharp's book you mentioned, the most profitable traders have a low % of winners.
Van K Tharp's book had been one of my Bible for years, but with experience I've found out the positive Expectancy quest doesn't make sense, precisely because you have no clue what your expectancy or your % winner is, you just can't. A positive expectancy system just tells you that if you had 1 million lives and trade this system 1 million time, in average you are profitable.
My recent findings tend to show that with an anti-martingale system, you don't have to care about your expectancy or your %winner to be profitable.
Some posts of mine I'd recommend on the topic.
http://blog.thelordoftrading.com/2011/07/all-my-friends-are-millionaires.html
http://blog.thelordoftrading.com/2011/09/infinite-trader-theorem.html
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