Good morning, Daily Direction readers!
I like to use Daily Direction to show you real-world instances of how my technique may help you establish good trading habits. But that doesn’t mean you’ll win every trade! That’s not going to work. Any guru who claims to be able to promise a 100% winning record is selling you snake oil.
My method is built on the principle of attempting to make more profitable transactions than unsuccessful ones. If you can close more profitable trades than ones that lose you money, you’re well on your way to growing your wealth.
But how do you implement such a plan? It all depends on accurately analyzing your trading habits.
This simple formula will allow you to properly measure success and manage risk, helping you keep the money you already have and work toward earning a profit.
It’s pretty simple! There’s no reason why you can’t start using this strategy today. Let’s jump in and see what it’s all about:
Formula For Growth
Trading is never viewed as simply one, two, three, or four trades. For you to have a better understanding of how my 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.
Side note: 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.
Adjusting the Formula: 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 to help you get there!
Keep On Trading,
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