There are certain indicators, levels, or other ways you can increase your odds of being right >50%, but you'll never get significantly higher
You always hear people let your winners ride or cut your losers early. Easier said than done, right?
Well, it's a mathematical fact that implementing this will improve your trading profits
The math behind leaving runners on and cutting losers early 👇👇👇
There are certain indicators, levels, or other ways you can increase your odds of being right >50%, but you'll never get significantly higher
You HAVE to let your winners run and cut your losers early.
Example: you take 100 trades for $100. Winners win $10, losers lose $10. To profit, you need 51 winners (+$510) and 49 losers (-$490)
Example: you take 100 trades for $100. Winners win $20, losers lose $5. To profit, you need 21 winners (+$420) and 79 losers (-$395)
You can essentially lose 4 out of every 5 trades and still make money if you simply let your winners run and cut your losers
2:1 (winners run 20%, losers stopped out at 10%), you only need to win 34%
3:1, 26%
4:1, 21%
You decrease the # of trades you need to hit by having your winners outweigh your losers
1) Have a rule on your stop losses. Personally, every trade I enter I immediately set a STOP order for -10%
2) Have a target profit level for winners. For me, I like the 2:1 risk/reward so once a trade hits 20% profits, I start to scale out
So when my trade hits 20%, I scale out part of my position and move my stop order for the rest to 10% profits
Remember, YOU CAN ALWAYS RE-ENTER.
1) Your thesis of it breaking the level is no longer valid
2) If it breaks above the level again, you can just re-enter
Special thanks to @AdamSliverTrade , @notmrmanziel , @TradingWarz , and the rest of the #LDL crew for getting me on this path and helping inform threads like this
More from Tradingthread
1. Successful Investing starts with Education
2. Psychology of Trading & General Rules
3. Essentials of Fundamental Analysis
4. Master Technical Analysis
5. Screening for Stocks
6. Making a Watchlist
7. Money Management
8. Diversification of Accounts
1 // Successful Investing starts with Education
Following 2000-2002, I realized that I needed an education to help me understand many of the topics mentioned in this thread.
So, I started to educated myself using books. Seek mentors as well.
Then
**16 Must Read Stock Market Books**
— Chris Perruna (@cperruna) November 20, 2019
Gifts for the Holidays!
Reminiscences of a Stock Operator
by Edwin Lef\xe8vrehttps://t.co/DozMNFmvZI pic.twitter.com/b6wEhzMp8n
2 // Psychology of Trading & General Rules
Develop a working SYSTEM (for you)
Preservation of capital
Consistent profitability
Cutting losses short
Superior returns
Understanding “You”:
What is your general personality?
What influences your decisions?
What is your lifestyle?
3a // Essentials of Fundamental Analysis
Earnings Per Share:
1. % Change in Latest Qtr EPS vs. Same QTR Prior Year
2. % Increase in Next Year’s EPS Estimate vs Prior Year’s Actual EPS
3. % Change in Latest EPS, trend past several qtrs
4. Annual % EPS Growth Rate of Last 3 Years
3b // Essentials of Fundamental Analysis
Sales / Revenues
1. % Change Latest Qtr’s Sales vs. Same Qtr Prior Year
2. % Change Latest Reported Fiscal Year Sales vs. Prior Year
3. % Change in Latest Sales, trend past several qtrs
4. Annual % Sales Growth Rate of Last 3 Years
Wave theory resources:
https://t.co/zMLJx0Posg
Recommend checking out @StockDweebs newsletter. I don’t practice wave theory myself but have found his picks highly accurate and like to correlate them with my own.
YouTube channels:
TrendSpider @TrendSpider
smithsintheblack @RobInTheBlack
Sara Sabatino @ssabatino84
_ms_izzy @_ms_izzy
Learn to Day Trade @TrueBubbleHead
StockDweebs @StockDweebs
watchjoshtrade @watchjoshtrade
BullTradeFinder @BullTradeFinder
MagicMike @magicmiketrader
I'll link new threads to this post as I tweet them. Don't go off my work alone, use content by others as well!
🟥 Support/Resistance Flips -
Here\u2019s a little thread on my bread and butter in trading $ETH and $BTC. I base 80% of my trades around simple S/R flips.
— Jelle (@CryptoJelleNL) February 5, 2021
Many traders and investors on here use all kinds of complicated methods, I use a few horizontal lines. pic.twitter.com/Av1Fgdop6L
🟥 Divergences - CHEAT
Morning gents, here's a quick cheat sheet to help you spot divergences while trading $BTC, $ETH and other $ALTS.
— Jelle (@CryptoJelleNL) February 6, 2021
Enjoy, let me know if you want cheat sheets on anything else in the comments below \u2b07\ufe0f\u2b07\ufe0f pic.twitter.com/yjZ43CTHkJ
🟥 BTC Pairs -
Here's a little infographic on why $BTC pairs matter in a bull market.
— Jelle (@CryptoJelleNL) January 16, 2021
Grow your BTC holdings by simply re-balancing spot $ETH and $BTC.
Example below: pic.twitter.com/8JbK6sqjVD
🟥 Funding - THREAD + CHEAT
I've seen many people talk $BTC, $ETH and $ALTS funding and its implications without fully understanding the concept. Here's a quick thread that explains what funding is, how it works and what it can tell you, along with a simple cheat sheet. pic.twitter.com/Hil815E99q
— Jelle (@CryptoJelleNL) February 7, 2021
his content from the playlist start with "how to read stock charts". It's precise and on point and short enough for you to get through this week even if you did one video tonight .. I like his teaching method .. he's slow and very easy to understand
As for DD. It comes from many factors. Mainly the trading platform itself has updated news posted on the ticker you want to trade.
https://t.co/1f8wQs1LcA
Really liking this website it has breakdown of the financials & summary of SEC filings. (con'd)
Also a whole bunch of other stuff that it focuses on the companies that you search. As for what I look for?
10-K & 10-Q.
Read 8Ks ..company updates
Also look to see if they did an recent Offerings (S-4 filings)
Also look to see S-3 filings for upcoming dilutions.
cont'd
https://t.co/nxP0hAJ4UH (Great place for quick articles on many stocks that are posted by analysts who do very good work digging info)
https://t.co/KsYqlmTlQ8 for quick news info
https://t.co/v5xGZqWhbn For constant world news