|
Commodity and Futures - Physical commodity and financial futures markets.
|
|
|
|
|
Posted by on January 1, 2008, 8:54 pm
Most approaches to systems of trading in the FOREX markets are of a
predictive nature.
The reason for this is simple. With the high level of leverage one can
use, if one can
just predict accurately the direction the market is headed, literally
millions of dollars
can be made in the matter of just a few minutes. It is this
possibility that is the root
of the excitement one gets from trading the markets and the high one
gets when he or she
is right.
There is, however, another approach which is not as exciting but is
logical and mathematical
and does not require the use of predictive abilities.
Such an approach requires that one does not try in any manner to guess
where the market is
headed and have fixed strategies in place for each and every
possibility within the market.
Such an approach does not leave anything to chance and in so doing,
the outcome is always
certain and the excitement of being right will not be there.
What is there however, is the profits that will come with it.
In making such an approach, one must look at all possibilities with
every move of the market
and if one does that, it can be seen that the market has only two
possibilities at all times.
It will either go up or it will go down. It then just ends up with the
same odds as a toss of
a coin.
The odds in a toss of a coin is 50-50 and as such one cannot have a
winning advantage so where
can an advantage be created ?
Ok. What if we had a situation where you bet on a toss of the coin and
if you win, you get twice
what you bet ?
This now changes the picture dramatically.
Each time you win, you get $200 to your $100 bet...making $300 total
Each time you lose, you just lose your $100
Your odds of winning and losing still remains the same at 50-50 but
your leverage is in the amounts
you will end up with each time you win or you lose.
Let's try looking at 6 tosses of the coin and an even outcome
throughout. So you would win 3 times and
also lose 3 times.
Your outlay is $600 for 6 bets and you win 3 and you lose 3.
For each of the 3 wins you have, you get $300 which is $100, your
original bet and $200 which you win.
3 wins will then total $900 for a total outlay of $600 equals a profit
of $300
Your betting could go like this.
Start $600, bet $100 ...Lost.. $500 remains.
Start $500, bet $100 ...Win .. $400 remains plus $300 win.. total $700
Start $700, bet $100 ...Lost.. $600 remains.
Start $600, bet $100 ...Win .. $500 remains plus $300 win.. total $800
Start $800, bet $100 ...Lost.. $700 remains.
Start $700, bet $100 ...Win .. $600 remains plus $300 win.. total $900
You could use this strategy here.
http://www.simple-forex.biz
|
| Similar Threads | Posted | | Swing Trading, A Scientific Approach | August 1, 2007, 4:33 am |
| Swing Trading, A Scientific Approach | September 3, 2007, 5:44 am |
| Swing Trading, A Scientific Approach | August 10, 2006, 11:31 am |
| Four Keys To The Promised Land Of Riches | December 17, 2007, 7:42 am |
| Charlie's Four Keys To The Promised Land Of Riches | November 24, 2007, 5:26 am |
| forex signalforex trading signalfree forex signalforex signal system tradingforex provider service signalforex day trading signalforex trade signalchart forex signalreal time forex trading signalforex free signal softwareforex signal serviceforex signa | January 13, 2008, 4:04 pm |
| Market Timing - The TOP-DOWN Approach | May 13, 2007, 3:42 pm |
| Price Driven Forex Trading is a method of trading the forex market | November 10, 2007, 6:44 am |
| Exploit The Best Moves In The Forex Market With 3 Forex Trading Strategies | July 30, 2007, 4:11 am |
| Exploit The Best Moves In The Forex Market With 3 Forex Trading Strategies | September 1, 2007, 9:16 am |
|
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap