Well, if your money management is set up with the right profit loss ratio, it is possible. Let's use 30 pips as a profit target on every trade and 20 pips as a stop loss on every trade.
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We will use 10 trades to make it easier using percentages. Winning 5 trades at 30 pips per trade, nets pips profit. Losing 5 trades at 20 pips per trade is pips loss. The net profit for ten trades is 50 pips gain.
Winning 6 trades at 30 pips per trade, nets pips profit. Losing 4 trades at 20 pips per trade is 80 pips loss. The net profit for ten trades is pips. But working out the math, 7 winning trades at 30 pips, nets pips profit. Losing 3 trades at 20 pips per trade is 60 pips loss. Using a profit loss ratio is profitable for making money in Forex trading. This could mean using a 60 point target with a 40 point stop loss as well.
HIGH ACCURACY FOREX 80% AVERAGE WIN RATIOFXLIFESTYLE BINARY OPTION SIGNALS
You may find that your trading strategy can only get a 20 point target so you may need to do the ratio. Using the ratio, with a 20 point target, you will have less than 20 as a stop loss and this is too small of a stop loss for Forex trading. There are so many market forces that can swing more than 20 pips and hit your stop loss. Practically speaking, you need to work with the currency pairs with the smallest spreads when using a 20 point stop.
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Now, knowing the right target loss ratio, the right trading strategy needs to be incorporated to make this work. Everyone is highly encouraged to analyze and find connections that benefit them as an individual trader. This is not limited to the above, and many more ideas can be created. Do you notice any cause and effects? Let us know down below in the comments section! It allows us to focus on the most important and valuable core tasks, methods, and resources.
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How To Use 80/20 Rule or Pareto Principle In Forex Trading
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Number 1: trading performance. Traders can analyze these relationships: Are the majority of losing trades caused by the same mistake? Are the majority of losses coming from a few trades? Are the majority of losses coming from a small number of days? The same questions can be asked for profits and winning trades as well.
Traders can analyze these relationships: How much time is spent on each task and how much benefit does it bring? What are the crucial tasks in my trading that lead to the most results? What actions are the most beneficial for my results? Number 3: the market. Number 4: strategy performance. Traders can analyze these relationships: Do the majority of the trading opportunities occur at the same points during the strategy?
Are the majority of my wins generated by a minority of the same entry type? Do the majority of my filters have a very small impact on the performance? Does a minority of my tools and indicators have the most positive impact on the strategy? Thanks for dropping a comment down below.