Hubert Senters here.
With another example of how trading really should work in my opinion. Heads up, this is just my opinion. Everyone has one their own different distinct way that they like to trade. But I’m going to walk you through here.
Here’s an $11X gang not bad and then minus one, minus one. Let’s just count them all up together. That’s $11 positive. One, two, three, four five, six, seven. So that’s seven negative so $11 minus $7. You do the math, it’s not that hard. So you’re up four on them. We’re still alive there. Nothing bad is happening yet. And then you get another gift.
There’s another minus. Now, you’re down to a minus. You’re down to minus three on that one then you initiate another trade. Here’s the short. There’s a stop, target 1, target 2. This is going to be bigger than plus three. Okay.
So that’s the way we look at it. Small strategic, small losses and then what you’re hoping for is for those larger gains. That’s how you trade just about everything. As you can see right here on this example of a 10 year note trade at one point that was up $1609.38 right now only up $1500.
But the initial stop-loss that I took on this thing was actually right here. I will move this so I can show you. It was initially minust $156 so that would be considered a $9 or a $10X on that potential trade because I’m only risking $156. If I covered it right now it’d make $1500 so it’s about a $10X. That’s how I like to do things. I will trail my stop down here to make sure that I can’t lose any unless there’s an exchange went down or some other kind of craziness went on.
And I will loosely trail my stop-loss. But this is how I like to trade. And usually when people start getting away from what’s the success ratio of that trade? It’s a good question. In my opinion, it’s just the wrong question. It’s not a bad question. The better question is what’s the risk versus what’s the risk versus reward ratio on that bad boy?
The success ratio is important too. Like if you have something that has a risk reward ratio of $1 to $1000 but only works 1% at a time that’s no good either. So you want something where — I don’t know about you but I’m not right more than 50% of the time on most of my stuff.
Okay. If I’m really high 55 maybe 60%. But most the time I’m wrong more than I am right. So I have to have good risk reward ratios in order to come out positive on this thing we call trading. Anyway, I hope that little rant helps you out.
Mark Helweg and I are going to be doing a special webinar on ‘’How to Trade Minnow Risk to Target Whale Profits,’’ Thursday, April 26th at 7:00 PM EST and he’s going be talking about probability enhanced set-up trading, locating price levels, how to scan for both intraday and swing trades that will be Thursday, April 26th at 7:00 PM.
Good luck. Hope it helps. And I’ll hyperlink you to the form.
