So, the US stock market is skyrocketing and so is the UK one – thanks to a falling pound.
So what is stopping you getting involved? Let's get to the solutions. Get that pen and paper ready. This is the exciting bit. All right. First of all, we're not right all the time. Let's say the price is a hundred and you think it's going to go to 120 or it might get as low as 80 you might do a hundred trades. If you did a hundred random trades, 50 will go up, and 50 will go down 20 you'll make a net return of zero.
All we're trying to do is go from 50 50 a coin toss to 60 40. 60 40 not 70 30. That’s it – to be right 60% of the time in our trades.
Okay. Sometimes you've got a winning streak. If you get a winning streak, you might be right 10 times out of 10 for, I don't know, 10 times in a row, but not for a hundred times in a row. We're only trying to be right 60 40 and guess what? That gives us a net positive return.
That's something we can work with. And that way we can scale up our capital and make more. Like I said, if you've got the skills to make a thousand you can make two. If you can make two then you can make four and remember each month you're not guaranteed an income. We're trading. Some months you might make 2000 and then you save the excess for the month in which you make nothing. So you iron out the ebbs and flows of capital so that you can get something more consistent because we want to be consistently profitable.
You're going to have winning months, losing months. You saved the money from the winning for the losing months. Then you iron it out and you have a net positive return. That's all trading is. It's what it is and that's where the mistake people have made. They'd been paying, trying to pay more and more money for the holy grail of trying to be right all the time.
Okay So what we're going to do is we're going to switch that around. Surely if we can just get a hundred pounds from the market, we can get a thousand. If we can get a thousand and get two and so on, all we've got to do is become better at knowing when to buy and sell without being stuck in front of the screen. All right It's as simple as that.
You will have seen on the BBC I was incredibly passionate about investing. I’ve even created free online materials to teach kids and parents. I hope you will take time to learn to invest.
Alpesh B Patel
www.trading-champions.com
