Powerup Capital Review #57

There are many trading strategies available to use and there are undoubtedly new strategies to be discovered by you as well.

Which strategy you employ whether it is a branch of technical analysis or utilizes fundamentals or even a combination of the two will always yield the best results when used in unison with a strong trading discipline.

Even with a trading strategy that yields a high success rate in terms of picking moves correctly, it is possible to lose money overall if the deficits from the losing trades are sufficiently large enough to outweigh the profits from the many winning trades. 

Similarly, with a trading strategy that offers no more than a 50% hit-rate, it is possible to make money if you are able to maximize the profits on the winning trades and minimize the losses when you get it wrong.

For example, consider betting in a casino on a roulette wheel. Unlike trading, it is purely a game of luck when it comes to deciding where to put your money.

The house edge is around 3% depending where you are gambling, which means that the house would expect on average, a player to lose around 3% on each bet.

However with poor discipline, gamblers will frequently end up losing 100% of their total stake for the night.

Obviously, trading forex is not gambling but the principle of good money management applies to both.

All the best in your trading,

Kenny Tham,

Petaling Jaya

Class of August 2008