How To Trade - By D man Today you will learn what you should have learned way back... and it's part...
Today you will learn what you should have learned way back... and it's part of my responsibility as your guide.
Since you joined @blockchainwhispers you had great trades, you had 20x on pundi alone, you had been prepared for biggest bitcoin crashes... however, some of you did better than the others.
Risk to Reward and Portfolio Management
Yesterday I was playing a poker. You don't need to be a pro to know that AA beats AK pre flop.
I raised a guy before flop, he re-raised, and I got him all in.
He caught a straight and won.
For simplicity reasons let's say he had 20% chances of winning and I had 80%.
And the discussion started when a guy asked me why I wasn't mad, and I told him I'd do it anytime. A guy next to me some old gambler said:
"but you can feel that tonight is a night of straights"
(take a notice of feel and old gambler as we will get back to that in a second)
I told him what I did was theoretically the best play possible, except maybe getting him to fold to me, which the guy wouldn't do.
Old man said fuck the math.
I told him then, I am willing to add 20% on top of my chips if he wants to get the same hand and we repeat it. Because even then I know the risk to reward ratio is favorable.
And EVEN IF I LOSE... on the long run I win!
The Long Run
within ten trades, anything can happen. within 100 trades, statistics is the king.
That is why you need to
1) divide your portfolio and
2) trade only when risk to reward is favorable
What is risk to reward?
Imagine you flip a coin with a friend, and he gets $1 when he wins and you get $2 when you win. The risk reward is 2:! in your favor.
And what do you do when you lose three dollars in a row, do you pull your hair?
No, you re check if the odds of heads and tails is truly 50-50, you check your rulebook and you do it more... because you're doing it right and he is just temporarily beating the odds.
Of course, over the long run he will win 50 times and you'll win 50 times... you'll make $100 and he will make $50 - you will lose $50, and you will profit $50.
As an aggressive, but risk tolerant trader, I like to chase high risk high reward trades. I am okay to lose three times in a row, and then on the fourth one to make it all pay off. Especially because most people are not willing to.
The most profitable trading style is contrarian. Always was.
Trading is a zero sum game, meaning among a bunch of guys, in order for one to win, others have to lose.. like in a poker — money doesn't generate itself, it's the investments on others at the table.
So you must outsmart when the odds are right.
And also, you must be informed. The best way to be and stay informed is exactly this, to be following Blockchain whispers -> t.me/blockchainwhispers the most accurate free crypto channel on Telegram.
If you are new and want to learn about our past performance, go ahead and see what people like you have said at: www.blockchainwhispers.com/proof
Trade smart. Do your homework. Don't rush and let's outrun them like a thurtle outruns the rabbit by steady and smart gains.
For Blockchain Whispers,