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Trading EXPECTANCY
New entrants to markets have a strong general belief that High Accuracy is the secret to success in trading too. Why? Because such belief system works well in almost all aspects of our normal life but very clearly NOT in markets!
Curious to know WHY?
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New entrants to markets have a strong general belief that High Accuracy is the secret to success in trading too. Why? Because such belief system works well in almost all aspects of our normal life but very clearly NOT in markets!
Curious to know WHY?
1/n
Concept of R - is a must to explain the concept of Expectancy. Now what is R?
R is simply abbreviation to 'Reward-to-Risk'.
Example - Suppose i took 10 trades and I lose at maximum Rs 10000 only in any stop loss hit.
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R is simply abbreviation to 'Reward-to-Risk'.
Example - Suppose i took 10 trades and I lose at maximum Rs 10000 only in any stop loss hit.
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Now if i make Rs 20000 in a trade i will say i made 20000/10000 = 2R today. If i lose Rs 5000 i will say i lost 0.5R today. Similarly, if i made Rs 30000 i will report it as 3R gain.
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