No worries here. Some may just need to practice RoR.
For example, assuming two traders use the same trading system in the exact same manner, the trader who considers “ruin” to be losing 50% of the account or portfolio value, would have a higher RoR than the one who views “ruin” as meaning a 75% loss. After all, it is less likely that you will lose 75% than 50%.
The RoR is mostly discussed when evaluating trading methods, but is tied very closely to risk and money management strategy. The more you are putting at risk on a per trade basis, the higher your RoR is going to be, all other things being equal. Other factors which contribute to the RoR determination are win rates and average win vs. average loss figures.
1)The starting point for any good part-time trader is to form a strategy. The first step to forming a winning strategy is to pick a timeframe that will be most suitable to trade within. Select a timeframe that you can work in productively.
2)Successful trading, as with any other meaningful activity, requires the proper mindset. ((((((((((((((Remember gamblers 2nd biggest thrill is to lose so try not to gamble))))))))))))))
Research is the key to success. Find out why a stock or currency has went up then understand why. Some of it maybe from a t/a or f/a point.
3)Any discussion of trading must include the topic of risk. It is risk, or rather the misunderstanding and misapplication of it, that most often trips up new traders, preventing them from ever becoming old traders.>>>>>>>>>>>>>In other words would you let someone blindfold you and led you into a building without ever knowing where the exit is? Hope not. People buy currencies and stocks because they think they will go up. If you don't understand compounding gains or stoping a loss then it should be understood. With otc's and forex being more risky it is some time better to use a wider loss. But always lock in gains. You like the currency or stock? Cool take profits and add to the support. You think your down to much to take a loss? See first paragraph.<<<<<<<<<<<<<<<<<<<<<<<<
4)Before you can properly outline a meaningful risk or money management strategy you first have to understand and define your personal risk tolerance. Some people are naturally risk-averse. They will tend to only feel comfortable exposing small amounts of their portfolio to the potential for loss.
The only people that don't want to be millionaires are billionaires.
