High Loss Rate Trading Strategies

Discuss With Us: http://www.informedtrades.com/524286-managing-high-loss-rate-trading-strategi...

In the 9+ years I've spent in the trading business, I've grown to appreciate strategies with high loss rates. By "high loss rate," I mean strategies that have a greater percentage of trades that are closed at a loss relative to trades closed at a profit. In order for such strategies to succeed, the average size of the wins must be greater than the average size of the losses. The lower the win rate of the strategy, the higher the average win must be to compensate or the losses. To put it simply and in line with conventional discussions of risk management, it's about the amount being risked relative to the potential gain.

I think the primary component in maximizing the average size of wins is the ability to use technical analysis and position management to ride trends. Riding as much of the trend as possible, with the most possible leverage that can safely be utilized, is the goal. This has ultimately made stop loss management -- the art/science of managing stops, trailing them up to lock in profit and free-up more capital for risking, while letting trends run until they are exhausted -- the focus of my technical trading. By focusing primarily on candlesticks, support and resistance, and trendlines (subjects you can learn much more about in our University), I can hypothesize as to trends may be reversing, from the perspective of shorter and longer timeframes.

This is the first in a series of posts on my technical trading methodology, designed to complement my Global Macroeconomic Analysis course. My goal is to eventually have an EA created that either places trades for me or alerts me to conditions that I may want to examine and trade.

Category:

Education

Tags:

• money management
• trading
• technical analysis
• daytrading
• forex

[firstspar]

if your going to make a video, at least have the deceny to watch it back...

[kirill747]

cock

[Robert2687]

Congratulations.

It took you 3 minutes to say a whole lot about nothing.

[coolnwynpyn1]

yes, it works 

[tituchotu]

were you drunk when making this video? what the hell was this?

[mbshiva]

Many thanks for the video, you have the ability of putting concepts across very effectively. Market is all about breaking the complexity to simplicity which is demonstrated by you guys at Informed Trades

[goerizal]

thanks.