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Friday, March 14, 2008

Systems and Methods

Challenge Accounts:

Investing Account Balance: $201.46

Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

In order to make profits you have to enter and exit the market. Be it the stock market, the forex, commodity futures, or whatever. Pretty simple, right?

Well how? How do you pick, based off a chart, when to enter and exit the market? Generally, this is where you need a system, or a methodology.

A trading system is governed by a set of rules that do not deviate based on anything other than market action. Emotional bias is therefore reduced because the systems operate within the parameters known by the trader. The parameters can be trusted based on historical analysis and real world market studies, so that the trader who is familiar with the trading system and its operating characteristics can have confidence in a pre-determined trading strategy.

* * *

Investing Account Balance: $201.46
Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research and tolerance for risk.

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