There are so many ways to explain, so let’s try that in simple math.
Start with 100$.
You go in a trade, there are 2 chances: win 1$ or lose 1$.
Let’s say you have 50/50.
Option 1: win: you gain 1% of your account. New balance 101$.
Option 2: lose: you now have 99$.
Now this is tricky:
- If you are in option 1, in order to gain 1 more %, you will need to gain 1.01$ which is just a little bit harder than the previous trade.
- If you are in option 2, in order to get back to 100$, you now have to deal with a little bit of a harder game than “make 1% gain” because to make gain 1% of 99$ only gives you 99.99$.
So, you either win or lose and the burden is to keep up the same performance, which gets harder and harder each day. If today you are sick, if today the coffee is not same as yesterday, if you just have a problem at home with your wife, etc., it makes it much harder to concentrate and keep the same level of consciousness.
Now let’s get back to reality. Not only chance of amateur success is only 5%, also Trader must count in the fee we pay for each trade.
Normally 7$ for 100,000$ traded, which is 0.07% add up to the task.
Now that is impossible to win in long term if you not put yourself in a systematic and emotionless situation. Being a professional Trader is a mind game in the end.
Regards,
Will Vu - Forex Investors since 2006
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