The Truth About Trading Entry Points: Why Accuracy Isn't Everything

Hello, everyone. In the pursuit of success in forex, traders usually focus on finding a strategy that gives the highest entry accuracy. The pursuit of perfectionism in trading blinds them and prevents them from seeing the "forest for the trees". So what are you missing? What important detail is missing from your trading plan?

In this article, we will look at how you should calculate the ratio of risk and profit for your working trading system. A Forex trading system should include a clearly defined CAPITAL MANAGEMENT SYSTEM that is easy to follow. Money management today is one of the most important aspects of any trading strategy, but most traders neglect the whole concept of money management in their trading.

Most forex traders want to focus on the entry points provided by their trading systems. Their dream is to find a trading system that gives a signal to enter buys at the very bottom of the chart and a signal to sell at the very top!

The entry point is undoubtedly important. But we should not forget that at the moment of entry we can create an advantage for ourselves not only in the precise entry into a trade, but also in creating a favorable statistical expectation. Namely, by building a good profit-to-risk ratio into the trade.

Trading is a game of probabilities. We know that in N% of trades we will lose, and in XN trades we will win. But we should not forget that we can easily improve our statistics simply by ignoring trades where the profit potential does not exceed the potential loss by at least two times.

It is precisely the presence of money management in your trading strategy that reduces your losses and keeps you a winner. I say "keeps" because you have built a certain percentage of profitable trades into your trading system, and knowledge of that will filter out your emotions during the trading process.

Using this simple money management system will give you a general idea of how to move your trading exponentially forward in a positive way. In this article, I will explain how, by developing your trading system, you will determine the position size before opening it. Please remember that these are the basics that help you think correctly. You will need to perform the exact calculations specifically for your strategy on your own.

"We have all heard the famous trading axiom: cut your losses and let your profits grow. This is the aspect of money management in your trading system that brings big winners into the world. Money management pushes aside the subjective feelings present in people."

Richard Dennis

"I will say it again: I never made money by trading; I made my big money by waiting and letting my profits grow."

Jesse Livermore

The first aspect we must understand about our trading system is that our system gives us a positive expectancy. We can do this only through testing, but sometimes testing can produce a negative result if you forgot to include in the strategy rules a profit-to-risk ratio for each trade of at least 1:1.5 .

All beginners say that "a Forex trading system without 90% profitable trades is crap", and they are absolutely sure they will develop their own grail for others to envy. They are, of course, mistaken.

Dlya vsekh torgovykh sistem, realno rabotayushchikh na rynke Foreks, vazhno otmetit, chto:

To, chto nachinayushchie treydery ishchut sovershenstva, yavlyaetsya osnovnoy prichinoy togo, chto tak mnogo prodaetsya "super-mega-pribylnykh" strategiy i robotov. Vse oni reklamiruyut sovershenstvo s 90% tochnostyu ! Poetomu prodavtsy "filosofskogo kamnya" po 100 dollarov za shtuku, nikogda ne perestanut est svoy khleb s ikroy, kuplennoy na dengi prostofil.

Bolshinstvo nachinayushchikh treyderov zatsiklivayutsya na kolichestve (protsente) udachnykh sdelok, a ne na obshchey pribyli. Vse oni pokupayutsya na sistemu, kotoraya reklamiruetsya kak vyigryshnaya na 90%. Vopros: «Chto khoroshego v sisteme, kotoraya predostavlyaet 90% vyigryshnykh sdelok pri srednem vyigryshe v 12 punktov, esli dlya dostizheniya pobedy neobkhodimo terpet riski v 60 punktov?» Vy vidite, k chemu ya vedu? Eto vse ravno, chto vash luchshiy drug posle poseshcheniy 3 urokov po karate gotov srazitsya s 6 mordovorotami v podvorotne. On yavno proigraet)

V tablitse vyshe otobrazhena zavisimost veroyatnosti "slit" depozit ot protsenta pribylnykh sdelok v vashey torgovoy sisteme i sootnosheniya pribyl:risk v kazhdoy sdelke. Tak my vidim, chto dazhe esli vasha strategiya rabotaet v 60% sluchaev, no pri etom sootnoshenie pribyl:risk derzhitsya khotya by na urovne 1,5:1 , vy uzhe mozhete byt uvereny v tom, chto ne poteryaete vsekh deneg. A vot esli sootnoshenie pribyli k risku ravno 1:1 , pri tekh zhe 60% pribylnykh sdelok, veroyatnost poteri depozita pri serii ubytochnykh sdelok uzhe 12%.

Sootnoshenie pribyl:risk ot 1,5:1 i vyshe – vot pravilnoe myshlenie v torgovle. Minimalnye kharakteristiki pribylnoy strategii - 40% vyigryshnykh sdelok pri sootnoshenii pribyli k ubytkam 2:1 (sm. tablitsu vyshe).  Soglasno etoy tablitse, esli vy delaete 100 sdelok (kazhdaya iz kotorykh vypolnyaetsya po tem zhe pravilam), i u vas imeetsya 4o% vyigryshnykh sdelok pri sootnoshenii pribyli k ubytkam 2:1, vash risk razoreniya budet sostavlyat okolo 14%. Eto minimalnaya tochka ot kotoroy sistemu mozhno schitat rabochey.

Pozvolte mne vam pomoch: nalichie vysokogo protsenta vyigrysha – eto ne priznak togo, chto vy vyydete chistym pobeditelem. Esli u vas imeetsya 55% vyigryshnykh sdelok s sootnosheniem riska k pribyli 1:1, to vash risk razoreniya budet v rayone 27%. Tak chto esli vy torguete skhozhim obrazom, to pomimo etogo luchshe imet menshe pozitsiy s bolshey pribylyu!

V tselom, 42% vyigryshnykh sdelok s sootnosheniem pribyli k risku 1,6:1 takzhe bylo by khoroshim variantom. Eto oznachaet, chto vy vozmete s rynka 1,60 punktov na kazhdyy 1 punkt, kotorym vy riskuete. Naprimer, riskuya 40 punktami, vy poluchaete 64 punkta. Esli rynok povorachivaetsya protiv vas (pri vozniknovenii volatilnosti), vy reguliruete svoy ​​stop vverkh ili vniz.

Esli zhe vashi stop-lossy i teyk-profity variruyutsya ot sdelki k sdelke, to poprobuyte propuskat sdelki, v kotorykh sootnoshenie pribyl:risk menshe chem 1,5:1 . I uvidite kak uluchshatsya vasha obshchaya statistika torgov.

Nadeyus eta statya pomozhet vam v formirovanii i optimizatsii sobstvennoy torgovoy strategii. Ne zatsiklivaytes na poiske sovershenstva, a ishchite i prorabatyvayte pribylnye torgovye modeli.  I pribudet s vam profit.

S uvazheniem, Pavel TradeLikeaPro.ru