Money Management and Trading Strategies are much more important than the trades themselves. There are three steps to making a million dollars trading. Here they are:
- Trade enough to know what your expectancy value is for the next trade. This is controlled by logging every trade and then calculating this Expectancy Ratio Formula as follows:
ER = (Win x Probability of a Win%) – (Loss x Probability of a Loss%) You need a positive number - Next you need a trading strategy that assures you can grow your account, besides just betting the same amount on each trade. That can be a Percentage of your account, a Martingale or Anti-Martingale strategy (discussed in detail in our webinars and course)
- Finally, you must follow a consistent system as you trade larger and larger numbers of contracts or options.
