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Conditions for getting started on how to become a successful trader: pt 3.

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And the last comment. The basic trading formula can be expressed as follows:

 

Pp x Pp - Ru x Pu> 0

 

RP - the probability of a profitable transaction;

Ru - the probability of a losing transaction;

PR - the average profit in a profitable transaction;

Pr - the average loss in a losing trade.

           All actions that need to be taken when trading in financial markets are determined by this formula. It is clear that its first component must be increased, and the second reduced. You can increase Pu and reduce Ru only by entering into those transactions in which the probability of winning is high and excluding spontaneous and all other market entries. You can increase PP only by holding profitable positions long enough, at least so that the average profit is 2 or more times the average loss. You can reduce Pu only by entering into low-risk transactions and without hesitation closing unprofitable transactions at a predetermined point or even earlier, if it is clear that the transaction is not going as intended.

           In conclusion, I want to once again want to urge the reader to take seriously the issues of psychology and risk management. This is what will determine your success or failure in the markets. Do not step on the same rusty rake time and time again. Trade on demo accounts until you gain confidence. Do not hurry. To begin with, the main thing is to learn and save a trade deposit for further successful transactions. If everything is done correctly, profits will not be long in coming.

  

 

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