The only reason why my losing trades are of a higher number than my profitable trades is because I risk so little on each trade. This means I get stopped out right away if I am wrong..........but with a small loss.
When I am right (44% of the time) my profits are much better (supposed to be at least 4 times better than my losses) and therefore even with a lower batting average my account goes up in value.
If I were to do the opposite, as you suggest, that means that my profits would be small (though more) but my losses would be greater. Does that make sense to you?
Keep in mind that I was basically a day trader during the 80's. There were times I used to go in and out of a stock 8-10 a day. The key was not how many times I was right or wrong but whether I made more money than I lost at the end of the day. The batting average is of no importance.....the end result in profits or losses is what counts.
If I was only right 1 out of 10 times but the one time I was right I made $1000 and the 9 times I was wrong I lost $50 that would still put me ahead $500 at the end of the day.
Do I have to give you more examples?
Bottom line in trading is profits and not whether your evaluation was correct.
I got a call today from someone on this message board drilling me about why I was mentioning a sale. He stated that there has been a lot of suspicious selling in this stock from people that were trying to manipulate the stock price itself. He stated it was the reason the stock dropped from $25.17 down to 11.50 and that he was generating an investigation into who was doing that. Hey, I agree that there is a lot of manipulation going on in the stock market but his statements brought something to the forefront that needs to be mentioned.
"Even if you are 100% right in your fundamental evaluation of a stock, you still need more buyers than sellers to make it happen!" If everyone else is selling and you are standing there in the middle of the road saying "stop, this doesn't make sense", the reality is that you will get trampled on.
You need other investors to agree with your views in order to make money. If there are more people selling than buying you will be buried. Simple statement of very evident fact!
All I do is try to follow the big money and play the odds together with good money management and good risk/reward ratios. If I do this, I will make money while others are wondering why they lost theirs.
This is the last reply to your messages. The mood of your replies is downgrading and I do not appreciate it. I have taken my time to reply only because I am a courteous person, but none of your messages have had much thought behind them.