A Tip on Trading Systems

With Thanksgiving just a couple days away, we’d like to not only encourage a balance in your diet that will leave you feeling healthy and proud, but we’d also encourage a balance between risk and reward in your trading system!

Here’s an example of risk vs reward: If you go to a casino and bet everything you have on red, then you have a 49% chance of doubling your money and a 51% chance of losing everything. The same applies to trading; you can make a lot of money if you’re risking a lot, but then risk of ruin is very high. You need to find a healthy balance between risk and reward.

Let’s say you define ruin as losing 20% of your account and success as making 20% profit. Having a trading system with past performance results lets you calculate your risk of ruin and your chance of success.

Your risk of ruin should be always less than 5%, and your chance of success should be 5-10 times higher. So, if your risk of ruin is 4%, then your chance of success should be 40% or higher.

This is just a little trading system tip to keep in mind over the holiday! We at the Apiary Fund are sure thankful for all of you that make this community so great! Have a happy Thanksgiving, and if you’re traveling, be safe!

About Tom

Tom Lund is the Content Manager at Apiary Fund where he began his career in 2012. He creates and edits the educational material that Apiary Fund uses to train new foreign exchange traders. Lund researches and writes the investing news and tips for the Apiary Fund blog and website. He graduated from Brigham Young University-Idaho with a bachelor’s degree in English.

Like this Article?

Check out our newsletter for regular forex trading tips and advice!

Or you can visit our website to see what our unique business model is all about ...and how you can participate!

, , ,

Comments are closed.