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Opportunity Cost in Trading
Home :: Finance :: Trading / Investing
By: Larry Swing Email Article
Word Count: 798 Digg it | Del.icio.us it | Google it | StumbleUpon it

  

As for the losing trades that are part of the trading plan, almost nothing can be done to them. Accept them and move on. Losses and losing trades are part of trading. No successful trader ever trade without losses, far from the truth. Very few successful traders manage to have a percentage of wins to losses higher than 60-70%. Normally it's much less, around 50%. So they must accept the fact that at least 30% or more trades will be turn into losses.

If a trader cannot handle losses, he can either quit trading or alternative find a new or different strategy where he can find an extremely high percentage of wins to losses. But keep in mind that this is a Holy Grail, meaning it may not exist. If they do, the trader may have to wait a long time to find such a strategy.

Before taking a trade, make sure to ask if the next trade will hinder and pay for an opportunity in the future. That is, if the trade meets all the right condition and rules of the strategy and not another "intuitive gut feeling" trade that will add another check on the loss column. Giving up this type of trades will open up more opportunities for profitable trades in the future.

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Larry Swing is the President of the popular day and swing trading site http://www.mrswing.com a place where you can find free daily articles and videos covering education, market analysis and picks from Larry and other well known traders in the industry.

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