Still, when you are able to pinpoint with confidence the exact moment to execute a trade, you can drastically increase
your correct trade rate.
If you find something that has an 80 percent rate of return, you will fare much better here than you would on just an 82 percent returns — assuming you have a realistic
correct trade rate.
If you pay careful attention to your trades, you will find that will make more money off of trades with a higher rate of return — even if
your correct trade rate is a percentage point or two lower.
You want to trade the assets that give you the most profitable balance of
a correct trade rate and a high rate of return.
If you have
a correct trade rate of 65 percent for the EUR / USD currency pair, but you're only getting 75 percent returned to you, it will be better to switch over to something you only have a 62 percent correct trade rate on if the rate of return is 82 percent.
Not exact matches
For example, if you choose to only receive a 70 percent
rate on
correct trades, you can get a 10 percent rebate credited back to you if your prediction is incorrect.
If analysts are
correct with their forecasts and Omega Healthcare
trades at its normal P / FFO of 13.2, shareholders could receive a total annual
rate of return in excess of 13 %.
If these analysts are
correct and the company only
trades at a market - neutral P / E ratio of 15, the total annualized
rate of return exceeding 17 % per annum is very attractive.
The
correct training cycle for successful day
trading involves education, planning, routine, survival and getting to the point where a trader finds the set ups with which he is both most comfortable and can produce high success
rates.