5 Possible Outcomes Of Your Trades | Trading Basics 👶
Depending on your actions, you can get 5 completely different results
taking just one single trade.
1️⃣The first outcome is a small win.
By a small win, I mean a winning trade producing up to 2.5% account growth.
2️⃣The opposite situation leads to a small loss.
To me, a small loss is a losing trade producing up to -1% account decline.
3️⃣Occasionally once the price starts moving in the predicted direction, one can protect his trading position moving his stop to entry and making a position risk-free.
Being stopped out such a trade produces 0% profit. The level where the position is closed is called a breakeven point.
4️⃣If one perfectly predicts a future direction of the market and opens a trading position accordingly, occasionally, a huge profit can be made.
A winning trade producing more than 2.5% net account growth is called a big win.
5️⃣Being wrong in the predictions, however, one can adjust and trail a stop loss not letting himself be stopped out. Such behavior may lead to a substantial loss or even a margin call.
A losing trade that produces more than -1% net loss is called a big loss.
❗️Learning how to trade, I strongly recommend you eliminate the 5th outcome. Managing not to lose more than 1% of your account will substantially improve your trading.