The aim of this post is to warn would be traders of this unpleasant long road to success. here goes. .
Suppose the likelihood of your egy r slightly worse than a 50-50 coin flip at 40(triumph)-60(reduction). But improve your advantage by taking $ two profits for each $1 you risk
your e(v)= ($1x 40%x 2R) - ($1x 60%x -1R)= $0.2
(aka u can expect to earn $0.2 on average for each $1 risk)
suppose your target income bankroll averaging as follows
tgt mthly income = $5k
acc bal = $10k
risk/trade = 2 percentx 10k = $200
crunching a few numbers. This usually means you've got to take 125 transactions to churn a $5k profit with your egy's 0.2R e(v)
avg trade e(v)= $200x (0.2)= $40
est no. Of transactions to hit tgt mthly income= $5k / $40 = 125 transactions
too demanding? Break it down to realistic 1st steps:
milestone 1) earn 4 2R transactions each mth= $160
milestone 2) double acc bal deposit to 20k
earn 4 2R trades each mth= $320
milestone 3) compound.
It is appealing to use leverage, but if you dont know what you're doing. A word of caution- it isn't for the ordinary joe. Mental preservation is more important than capital preservation.
This tough road can also be why allegedly successful traders bestselling systems. It is so much easier to amass $ pple r willing to throw for hope. It is also why moderately successful traders register for a commission- to increase their income reduce the burden of investing for a living on their mental frame of mind.
Trading for a living is demanding. Give up today save precious time money. Do something else you've got a passion for. OR slog at it to get a mean of 7 years it requires to make the average successful trader.
Edit- lost multipliion signs