Why 80-20 thing does nt work in trading?
As an active or aspiring trader,
you’ve probably heard how treating your trading ‘like a business’ is an important part of making money like a true professional.
You might also have heard about the 80/20 rule. (And you might think it applies just like a ‘regular business’ — it doesn’t)
The 80/20 rule goes like this:
* 20% of your customers account for 80% of your sales
* 20% of your sales reps account for 80% of your sales
* 20% of your products account for 80% of your sales
… and so on. It’s not always exactly 80/20, of course.
Sometimes it’s 90/10 or 99/1 but whatever the number is, it’s an IMPORTANT number to know. And the law is important to keep in mind.
So how does it apply to trading?
Well … it doesn’t!
Unless you have really LOW standards for your return on investment.
Because if you do things that way,
only about 20% of your work will be what gives you your profits.
That is, you’ll spend a lot of time (80%) NOT being productive and wasting your effort on stuff that actually isn’t delivering cash in your account.
That’s not good!
What if you could flip that around instead …
… so that 80% (or better) of your work results in profits?
Not because you’re doing MORE work.
But because you’re doing a whole lot less!
That has a really interesting knock-on effect you’ll like.
Because doing it RIGHT not only cuts down on your time commitment, but it also ..
… bumps up your winning percentage too!
In fact, about 80% of your trades should be winners.
And that’s a good thing. A VERY good thing, because your return on your invested money (and time) has now gone WAY up!
So how do you do this?
Well, you need a system that cuts out all your wasted time — and eliminates the bulk of the losers from your trading too!
How do you do this super task?
use risk control-better stoploss
pick better entries
look up my other post-on dochian method
use a simple 5ema 20ema thing with a special hint t cut off loosers a lot
money management
it is trading 10 trades with 6 loosers,each loosing 2%,but winning 4 winners with each gaining 5%,net result being 8% profit.
problem is traders dont know how to do it or they have no control on risk-they allow risk to go up on its own.they simply look at sky=---------refuse to control risk-chnge this inactive mindset first.
As an active or aspiring trader,
you’ve probably heard how treating your trading ‘like a business’ is an important part of making money like a true professional.
You might also have heard about the 80/20 rule. (And you might think it applies just like a ‘regular business’ — it doesn’t)
The 80/20 rule goes like this:
* 20% of your customers account for 80% of your sales
* 20% of your sales reps account for 80% of your sales
* 20% of your products account for 80% of your sales
… and so on. It’s not always exactly 80/20, of course.
Sometimes it’s 90/10 or 99/1 but whatever the number is, it’s an IMPORTANT number to know. And the law is important to keep in mind.
So how does it apply to trading?
Well … it doesn’t!
Unless you have really LOW standards for your return on investment.
Because if you do things that way,
only about 20% of your work will be what gives you your profits.
That is, you’ll spend a lot of time (80%) NOT being productive and wasting your effort on stuff that actually isn’t delivering cash in your account.
That’s not good!
What if you could flip that around instead …
… so that 80% (or better) of your work results in profits?
Not because you’re doing MORE work.
But because you’re doing a whole lot less!
That has a really interesting knock-on effect you’ll like.
Because doing it RIGHT not only cuts down on your time commitment, but it also ..
… bumps up your winning percentage too!
In fact, about 80% of your trades should be winners.
And that’s a good thing. A VERY good thing, because your return on your invested money (and time) has now gone WAY up!
So how do you do this?
Well, you need a system that cuts out all your wasted time — and eliminates the bulk of the losers from your trading too!
How do you do this super task?
use risk control-better stoploss
pick better entries
look up my other post-on dochian method
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use a simple 5ema 20ema thing with a special hint t cut off loosers a lot
money management
it is trading 10 trades with 6 loosers,each loosing 2%,but winning 4 winners with each gaining 5%,net result being 8% profit.
problem is traders dont know how to do it or they have no control on risk-they allow risk to go up on its own.they simply look at sky=---------refuse to control risk-chnge this inactive mindset first.
