GUIDE ON HOW TO IMPROVE YOUR TRADING RESULTS … · This is how you lose money trading. It’s a...

GUIDE ON

HOW TO IMPROVE YOUR

TRADING RESULTS STRAIGHT AWAY

Learn an extremely important, yet simple tweak that can dramatically improve your performance

IMPROVE YOUR RESULTS TODAY · FOTISTRADINGACADEMY.COM

https://fotistradingacademy.com/trading-solutions-summary/

About Us

Fotis specializes in analyzing global macro events and data to enable

him to hone in to specific markets to trade. In the case of Forex, this

knowledge lets him know which pairs to focus on in order to have the

best chance of achieving positive, profitable results.

Whether, you are a new trader or, even if you have been trading for

years, this professional guide will show you a simple “tweak” that could

improve your results overnight!

Our Key Trainer: Fotis Papatheofanous, MBA

IMPROVE YOUR RESULTS TODAY · FOTISTRADINGACADEMY.COM · PAGE 2

Fotis, as you would expect from his name is the

key trainer at the Fotis Trading Academy. Fotis is a

highly reputed, extremely driven and successful

Global Macro Trader and Portfolio Manager.

He brings the power of his institutional trading

experience and discipline to the Academy and

benefits from an uncanny ability to explain complex issues in a very easy to understand way.


WHY DO MOST TRADERS LOSE? THE TRUTH BEHIND THE NUMBERS AND THE SECRET TO SUCCESS!

So how do you resolve this situation?

Imagine you went to a horse race meeting and backed the favorite in

every race. Yes - you will have a high number of winners – BUT the odds

are poor and therefore you are likely to end up losing money. The

money you will make when you win, will not be enough to compensate

the losers. It’s exactly the same for retail traders.

Many of our students here at the Fotis Trading Academy have increased

their average profit per trade, from around 30 pips to over 300.

It’s actually easier than you may think. First, let’s look at the “3 Step

Process”, we use here at the Fotis Trading Academy when trading the

markets.

Why do most retail traders lose money?

Most new traders are focusing too heavily, on the number of wins, the

frequency of successful trades, rather than the profitability of each win.

They wind up purely gambling away their money.

Recent results published by brokers

show that 90% of retail traders lose

money, despite the fact that over

60% of their trades are “winners - how

can that be? It’s because they lose

more money in their losing trades than

they win in their winning trades: they

are losing more money than they are

making.



The Math

Now let’s delve a little deeper into the proof of how to stack the mathematics in your favor.

A few years ago the Forex Broker FXCM analyzed over 12 million trades by retail clients and the results were astounding!

The chart below shows the trading results on the 15 most frequently traded pairs. The blue bars show the percentage of trades that ended with a profit; the red bars show the percentage of trades that ended with a loss. Traders of EUR/USD for example, were profitable on 59% of their trades and unsuccessful on 41% of their trades.


So if traders are in the right direction more than half the time, what are they doing wrong?



In the chart below, we can clearly see that the average losses are bigger

than the average gains. The edge gained by sound analysis and directional

accuracy is instantly lost. Traders lose more money on their losing trades

than they make on their winning trades.

Looking again at the EUR/USD: EUR/USD trades were profitable 59% of the

time with an average profit of 65 pips. Trades were unsuccessful 41% of the

time with an average loss of 127 pips. Despite traders “winning” more than

half the time, their winning profits were only half the size of their losses and -

as a result – they lost money overall.

The results for the volatile GBP/JPY pair were even worse. Traders were

“winning” an impressive 66% of the time in – that’s twice as many successful

trades as unsuccessful ones. However, traders made an average of only 52

pips on winning trades, while losing an average of 122 pips on losing trades.

They therefore lost money overall.


Cut Your Losses Early, Let Your Profits Run

When your trade goes against you, close it. Take the small loss and then try again later. It is better to take a small loss early than a big loss later. Conversely, when a trade is going well, do not be afraid to let it continue working. This is harder for some than cutting losses, especially if you have just experienced a string of losses. But it is the only way to tip the graph in your favor; experience and knowledge will build confidence.

Resist the temptation to take profits off the table or to wait for the ‘inevitable’ turnaround to eradicate the losses. This is how you lose money trading. It’s a simple rule but it’s not always easy to execute.

How to Do It: Follow One Simple Rule

Always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book.

This is called a “risk/reward ratio”.

If you risk losing the same number of pips, as you hope to gain, then your risk/reward ratio is 1-to-1 (sometimes written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 1:2 risk/reward ratio. If you follow this simple rule, you can be right in the direction of just half of your trades and still make money. This is because you will be earning more profits on your winning trades than what you are losing on your losing trades.

You should always use a minimum 1:2 ratio. However there are lots of potential trades.

Remember, the higher the risk/reward ratio you choose, the less often you need to correctly predict market direction in order to make money trading.

Making Money as a Forex Trader and the Risk of Ruin Matrix

Let’s now take a look at what it takes to move from being a break-even trader to a profitable one. There are two options: either your risk reward must increase, or your accuracy must improve. Increasing your risk reward is the best option because accuracy is not usually as consistently dependable.



If you want to be a trader who simply

makes 1R profit on each trade, you have

to win 66% of time with a risk reward of 1:1,

50% of the time with a 1:2 risk reward, and

with a 1:3 risk reward your winning

percentage can be as low as 33% to make a

1R profit.

Risk Reward is a concept every trader must understand and it is the key to

successful trading

Of course, once risk reward is understood the long term profitable trader

also needs the accuracy and for that he needs to develop a trading edge.

It’s all about increasing your odds, improving probabilities and becoming

consistent.

As you can see in the chart,

with a risk/reward of 1:1 you

have to win 50% of your

trades to break-even. As your

risk/reward moves up you can

win fewer of your trades and

still break-even; a risk reward

of 1:2 requires only winning

about 33% of your trades to

get to break-even, and a risk

reward of 1:3 requires you only

to win about 25% of your

trades to break-even.



The risk of ruin matrix is based on 100 trades with a possible draw down of 40%. According to this Matrix, if you do 100 trades (all executed following the same rules) and you have 42% winners to losers, and you pull out $2 for every one you risk, your probability of ruin is less than 14%.

The Focus Should Be On the Reward!

Reward against risk (percentage gain against percentage risked) is a vital concept in trading. Some reasonable numbers to build on are 42% winning trades to losing trades with a 2:1 profit to loss ratio.

What Is The Most Important Information In The Risk Of Ruin Matrix?

Having a high winning percentage is not an indication that you will be a net winner. If you were to have a 55% win ratio with a 1:1 risk to reward, your risk of ruin would be higher at 27%. The bottom line is that it is much better to trade less often for bigger rewards.

A 42% Winning Ratio with a 1.6:1 would also work well. It would mean that you would gain 1.60 for every 1.0 that you risk. For example, if you risked 40 pips you need to look for 64 pips in return. Does that mean you close your trade after a 64 pip move in your favor? No - you adjust your stop to preserve profits should the market turn against you.

______________________________________



How to Trade Like a Professional


Our approach at the Fotis Trading Academy provides a “trading EDGE”

that will take you from being an amateur trader to a professional by

propelling your results to new levels.

Professionals at hedge funds and large investment banks apply a top

down approach to analyze what’s happening around the globe and

estimate where the price of a particular currency is heading before it

happens.

You need to understand that all financial markets are inter-related and

how action in one sector is often a great indicator of what will happen next

in others. Once you have this knowledge, it’ll be you who calls the trading

shots.

You must have this kind of knowledge and an understanding of the macro

environment, to put all the pieces of the puzzle together, before using your

technical analysis to pinpoint entries, stops and targets. Adding the global

macro string to your bow is what will give you the confidence to stay in

trades longer and reap greater profits from every trade.

This kind of knowledge and this professional approach will put you among

an élite group of traders who really understands what is happening around

the world financially. Once you have mastered it, you will have

the potential to trade futures, CFDs, commodities, indices and stocks as

well as manage your own portfolios and pension arrangements.

Macro-Economic Fundamentals isn’t rocket science and with our help,

within just a few short months you will have the skills to take your trading to

a whole new level.

If you wish to improve your results you must reject the reactive strategies

that most amateur traders use in the hope of making profits.


EXAMPLE 1: LONG TRADE ON EURUSD DAILY CHART

In this case, we applied STEP 1 and we determined that due to specific

Fundamental factors, the EUR was a good candidate for a long position

against the USD. We then moved to STEP 2 to determine the structure of

price and who is in control, either the buyers or the sellers. Applying STEP 3

then was the easiest thing to do, since we had a strong conviction about

the trade and our proprietary strategies and tools, we share with you,

showed us exactly WHERE to go Long and WHERE to place the Stop. After

the entry, our goal was to go for a multiple Reward versus the Risk we

took.




EXAMPLE 2: SHORT TRADE ON GBPUSD 4H CHART

In this case, we applied STEP 1 and we determined that due to specific

Fundamental factors, the GBP was a good candidate for a short position

against the USD. We then moved to STEP 2 to determine the structure of

price and who is in control, either the buyers or the sellers. Applying STEP 3

then was the easiest thing to do, since we had a strong conviction about

the trade and our proprietary strategies and tools, we share with you,

showed us exactly WHERE to go Short and WHERE to place the Stop. After

the entry, our goal was to go for a multiple Reward versus the Risk we

took.


______________________________________

IMPROVE YOUR RESULTS TODAY · FOTISTRADINGACADEMY.COM

LEARN TO TRADE & INVEST LIKE A REAL PRO!

Visit our website and CONTACT US to find out MORE! We don’t bite!

www.fotistradingacademy.com

There is a solution and we can help you!

WE can show you EXACTLY why you lose and more importantly, we can

show you how you can finally turn this around and get the future you

deserve!

How bad do you really want to feel the success?


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