Probability. Many people in the market often ask us, what is the winning probability of your operator analysis?
In the past, we will always ask for the probability of other method.
But later we realized, probability is not the right way to judge how the effectiveness of a method.
Here are the reasons why :
1) if your cut loss is more than your profit. Even with a 90% winning rate you are still losing. If 1 trade cut loss RM 1,000 but 9 trades profit RM 100. You are still losing RM 100.
2) Only gamblers use probability to judge.
Gambling profit and losing sharing the same risk. Example : if you win, you earn RM 1, but if you lose, you lose RM 1. So if you have probability of 6/10 winning rate, you will make a small profit which is not workable in stock market, because stock market is not a place for gamble.
If you are applying gambling method to trade in the stock market. High possibility is that you don’t understand what you are trading or investing. Just purely based on guts and hope.
If you know what you trade, you know how far the price can go. Not fixed a profit or loss point.
3) Is about the value of return, not the how many times you make profit.
Our main objective in the stock market is to make profit. But many traders focus too much on probabilities to justify how effective is your trade.
A very good examples on our trading result. Our probability is 67.41% average but we can achieve 49.96% return in 7 months.
If you are using the same risk and reward ratio you will never be able to achieve this.
Here’s the calculation to prove probability game is not working : we traded 111 & 70 trades are profit over the 7 months. If each trades you get RM100 profit and RM100 loss. You will only get RM 7,000 profit and lose RM 4,100. At the end of the day you only profit RM 2,900 with RM 25,000 capital, which is only 10%+ of the capital over the 7 months. ( do you know why you can’t achieve more than 20% return now? )
The secret to beat the market and achieve the same result as us is to optimizing the potential profit and minimize the potential wrong trade. By achieving this, you have to understand the operator, moving in and out same time with them.
Conclusion, probability is not everything to judge, and is a very risky approach for traders to apply in their trades. Because this is leading the traders to gamble more and don’t understand the market.
We believe that you might stuck in the situation we mentioned above and you will be interested to find out more about our Operator Analysis to help you in your trading to achieve consistent profit every month.
Contact us now by email or Whatsapp or call us. Allow us to have an opportunity to provide you a consultation to solve your problem.