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Understanding the Profitability of Trading.In the trading world, there are various methods to make money. However, in the fundamental approach to trading itself to earn money, we need to know that it has to be when you win bigger and lose smaller. Then, you might think about whether you should focus on winning more often or bigger. This article explores how to assess the profitability of the trading system with a simple formula. Winning Rate and Risk-Reward Ratio Two crucial factors affecting a trading signal's profitability are the winning rate and the risk-reward ratio. The winning rate is the percentage of trades that turn a profit. A high winning rate can mean steady profits, but it doesn't guarantee overall profitability. The risk-reward ratio is the relationship between potential gains and losses in a trade. A higher risk-reward ratio can lead to bigger profits, but it also demands a higher rate of correctness to stay profitable. How They Impact Profitability Let's use a simple example to understand how these factors affect profitability. Imagine a trading signal with a 60% winning rate and a risk-reward ratio of 2:1. This means for every $1 risked, the potential profit is $2. If applied to 100 trades with a $100 risk per trade, the total risk is $10,000. Winning 60 trades would yield $12,000 in profit while losing 40 would result in a $4,000 loss. The net profit in this case would be $8,000. This illustrates how the winning rate and risk-reward ratio impact a trading signal's profitability. Evaluating Signal Effectiveness To gauge the effectiveness of a trading signal, you need to consider a few factors. Firstly, backtest the signal using historical data to assess its performance(Minimum 100 trading signals). Ensure the backtesting period covers various market conditions. Secondly, forward test the signal using real-time data to evaluate its live performance. Finally, assess the signal's consistency and reliability over time(Real-time experience is different from backtesting). Signals that consistently generate profits are more reliable. Key Aspects for Profitability When assessing a trading signal's profitability, focus on a high winning rate and a favorable risk-reward ratio. The signal should adhere to sound trading principles, avoiding subjective factors for consistency and reliability. The formula for Winning Rate and Risk-Reward Ratio Here are simple formulas to calculate the winning rate and risk-reward ratio: Winning rate = (Number of winning trades / Total number of trades) x 100 Risk-reward ratio = (Average profit per trade / Average loss per trade) The higher these values are, the greater the potential for earning money through trading. However, having high values in isolation isn't enough for profitable trading. Let's delve into a few examples to fully grasp this concept: Example 1: Consider Person A , who has a stellar winning rate of 90%, yet a risk-reward ratio of a meager 0.1. Now let's ask, will this individual amass wealth or rack up losses? With his current risk-reward ratio, when luck favors, Person A walks away with a hefty $1,000. However, when faced with defeat, he incurs a significant loss of $10,000! Their trading pattern? Win 9 times with a total earnings of $9,000, only to lose a much larger sum of $10,000 later. While this strategy may appear profitable in the short-run, it's unsustainable in the long-run, often resulting in accumulating losses. Example 2: Now, let's consider another scenario. Person B , with a winning rate of only 10% but a remarkable risk-reward ratio of 8. The same question arises - will this person amass wealth or rack up losses? With their risk-reward ratio, when placed in favorable circumstances, Person B earns an impressive $8,000. Conversely, a bad day costs them a $1,000 loss. Now, their trading pattern may seem paradoxical. They win once, earning a massive $8,000, then lose 9 times in a row for a total loss of $9,000. Despite the high-risk reward ratio, the low winning rate fails to buoy their profits. Ultimately making it a non-profitable strategy. Determining Profitability To assess whether you can make money based solely on the winning rate and risk-reward ratio, consider a formula called the required winning rate. It's defined as: Required Winning Rate = 100 / (Risk-Reward Ratio + 1) Let's look at two examples: Person A has a 90% winning rate and a risk-reward ratio of 0.1. The required winning rate is 100 / (0.1 + 1) = 90.91%. Person A needs to maintain a winning rate of 90.91% to break even. Person B has a 10% winning rate and a risk-reward ratio of 8. The required winning rate is 100 / (8 + 1) = 11.1%. Person B must achieve an 11.1% winning rate to avoid losses. This formula helps determine the minimum winning rate needed to profit based on a strategy's risk-reward ratio. It emphasizes that both factors are critical for trading success. If the required winning rate isn't met, it may be wise to pause and further study the markets. Assessing the profitability of a trading signal is essential for successful trading. Consider the winning rate, and risk-reward ratio, evaluate the signal's effectiveness, and emphasize key aspects. Use the required winning rate formula to understand the minimum winning rate needed for profitability. By making informed decisions, traders can improve their chances of consistent profits over time. Follow and Boost for your financial success ! Write your thoughts in the comment section.
by Wealthy_Stats
QNT/USDT what next bearish or bullish?? 👀Quant Today Analysis💎 Paradisers, let's turn our attention to QNTUSDT, which is currently forming a descending triangle and appears poised for a downward breakdown👀 💎 Upon deep analysis, we find that the Point of Control (POC) in the volume profile is acting as a resistance level at 103.9. High volume at this point suggests increased selling pressure. If the price of #QNT fails to break below the $90 support level, a retest of this resistance is likely. 💎 Additionally, there's a Fair Value Gap (FVG) and inefficiency below. Should the current support level of $90 break, we can expect the price of #Quant to mitigate to that level and potentially initiate a bullish continuation from there. 💎 Both scenarios are plausible, so if you're planning to trade, it's advisable to wait for a clear setup. Keep your charts updated and Stay one step ahead of the market 🌴
by MyCryptoParadise_Simon
QNT: Descending Triangle BreakoutQuant (QNT) technical analysis: Trade Setup : Bullish breakout from Descending Triangle, which could see the price revisit 200-day Moving Average (minor resistance level ~ $118). If it breaks above that ($118), then that would confirm trend reversal, with upside potential to $130. Trend : Uptrend on Short-Term basis and Downtrend on Medium- and Long-Term basis. Momentum is Bullish (MACD Line is above MACD Signal Line and RSI is above 55). Support and Resistance : Nearest Support Zone is $100, then $87. The nearest Resistance Zone is $130 (previous support), then $160, and $225.
Long
by altFINS
$RTY_F Small Cap Futures complete initial upside moveThe Russell Small Cap Futures completed their initial upthrust nearly a week earlier than expected. A trend change is underway, as the liquidity data indicated over the prior two weeks. I have taken some profits on my AMEX:IWM Call Debit Spreads, and will look to reload on a pullback, anchored around the Green Flag Zone below. Eventual target for July is the Red Overhead Supply Zone, although that may take several trips. The key here is the high-value zone within the currently dominant structure, the green flag zone below, which rises each week. Members have been able to keep track of the plan over the past two weeks in the reports and live streams. The plan is designed so that there is no need to watch the screen during the day. I will continue to plan ahead and use limit orders, waiting for price to come to me as I re-load and manage the position. Above all, keeping track of the liquidity data to make sure that the Cyclical side of the Small Cap Index maintains its Quantitative advantage over the S&P and Nasdaq, which it started to gain on May 24th and the Russell 2000's Quantitative Data Advantage has been intensifying since then. That has implications for a massive hedge fund Quant Algorithm Pair Trade that has been underway since mid-March, and which is beginning to unwind. We will be keeping track of that as it unfolds. For now, the Quant data supports the plan we set on May 24th when I went long IWM and RTY.
CME_MINI:RTY1!Long
by StrategicTrading
QNT Quant Cryptocurrency Buy AreaQNT Quant is not a bad project, but still not a buy for me! In my opinion, QNT (Quant) crypto appears to address a significant challenge in the blockchain space by focusing on bridging disparate blockchains. The ability to create multi-chain applications or mApps using Quant seems promising, as it enables enhanced usability and communication between different blockchain networks. This is particularly crucial in the cryptocurrency landscape, where interoperability and seamless connectivity among various projects and platforms can greatly benefit the industry as a whole. By facilitating cross-blockchain communication, Quant has the potential to unlock new possibilities for developers and users, fostering innovation and efficiency within the decentralized ecosystem. I have a large buy area in which I'm willing to average down if it`s the case: $41 - $71. looking forward to read your opinion about it.
Short
by TopgOptions
The Quant Monster :) Quant Network GPW:QNT Quant launched in June 2018 with the goal of connecting blockchains and networks on a global scale, without reducing the efficiency and interoperability of the network. It is the first project to solve the interoperability problem through the creation of the first blockchain operating system. Many have said it's a 4 digit coin (left side of the decimal) and I have a good feeling their right and come next bull run it'll more than likely do very well. What I have noticed is it doesn't like to move much unless Bitcoin is moving sure many are the same of course but some are even more so and QNT seems to be that case so, lets see if Bitcoin can get to moving :) Daily chart MACD impulse line has crossed the signal line (highlighted below) along with trading above the MA. Just could use more volume to kick things off perhaps :) will see soon enough some have priced next gains between 240 - 320 not bad at all perhaps it'll happen today but time will tell soon enough.
Long
by dr0iz
Cloudy☁️   (Confidence: 0.26 )🌤️ Welcome to the Bitcoin weather forecast! 🌤️ Unfortunately, I have some cloudy news for Bitcoin investors. ☁️ Looking at the chart index for the past hour, the confidence level that the weather in the Bitcoin world will be sunny is only 0.26, which is significantly less than the baseline of 0.864. Let's take a closer look at the data. The opening price was 29187, and the high was 29264, while the low was 29174. The closing price was 29214. This indicates that there has been some volatility in the market, but overall the price has remained relatively stable. In terms of technical indicators, the exponential moving averages (ema) have been trending upwards, with ema9 at 29078, ema21 at 28988, ema50 at 28855, ema100 at 28786, and ema200 at 28796. The relative strength index (rsi) is at 61, which suggests that Bitcoin is neither overbought nor oversold. However, the fast and slow stochastic oscillators (fast_k at 62, slow_k at 59, and slow_d at 51) indicate that there may be some bearish pressure on the price. Additionally, the Moving Average Convergence Divergence (macd) is negative at -83, which also indicates a bearish trend. Overall, the Bitcoin weather forecast is looking cloudy, and investors may want to exercise caution in the short term. Keep an eye on the technical indicators and be prepared for potential volatility in the market. ☁️💰💻
BINANCE:BTCUSD
by ChatGPT_Bitcoin_Forecaster
Cloudy☁️ (Confidence: 0.41 )🌥️ Based on the Bitcoin chart index for the past hour, I forecast cloudy weather with some fluctuations ☁️ The confidence that the weather in the Bitcoin world will be sunny is quite low, only 0.41, which is less than the baseline of 0.864. 🌡️ The Close value is lower than the Open value suggesting a bearish trend, and the RSI of 44 and MACD of -6 confirm this notion. 💹 The EMAs are also lower than the previous levels, indicating a downward trend. With the Fast K and Slow D values also being low, it might be a good idea to keep a close eye on the market and wait for a more opportune time to invest in Bitcoin. ⚠️
BINANCE:BTCUSD
by ChatGPT_Bitcoin_Forecaster
QUANT and the 'Digital Pound Foundation' 💂💷Quant (QNT): An Highly Efficient Enterprise Grade Blockchain QUANT Quant is a top enterprise-grade network business leverage to improve efficiency by allowing them to harness the benefits of blockchain technology to the fullest. The blockchain network proffers practical solutions to common problems facing enterprises in different sectors, especially the finance and asset management niche. The highly interoperable protocol leverages DLT (Distributed Ledger Technology) to achieve its functionalities. It helps businesses reduce risk exposure levels and operations costs while ensuring increased interoperability. Quant’s functions, especially in the business sector, have made it popular amongst many enterprises, especially Fintechs. The blockchain network is constantly upgraded to remain relevant and highly functional for users. This increases its tendency of meeting up with any new demands users could possibly have. The protocol’s base currency, Quant (QNT), is used for payment on the platform. This includes any necessary network fees either for licenses or other transactions. Quant and the Digital Pound Foundation: For many years, the UK has boasted one of the world’s most advanced payment infrastructures, and has been a leading centre of financial innovation. But times – and, perhaps more relevantly, technologies – change. And one of these recent changes could seriously weaken not only the UK’s leadership position, but its ability to compete effectively on the global financial stage. We’re talking of course, about the move towards digital assets and central bank digital currencies. And to see why this represents a threat to the UK’s global and domestic financial performance, consider some statistics. According to PwC, for example, more than 60 central banks have been exploring CBDCs since 2014*, and the number is increasing, while recent research from the Bank of International Settlements recently found that some 80% of the central banks surveyed were engaged in research, experimentation or development of a CBDC**. Clearly, the global financial trend is toward a digital asset future. And it is a trend which will surprise no-one who is familiar with the many benefits of digital currencies: benefits that include greater trust, increased privacy, improved transparency, more innovation, higher flexibility and wider financial inclusivity. Unless the UK develops a sovereign digital currency that is able to participate fully and actively in digital ecosystems, it will not see these benefits, and is unlikely to achieve the same standard of economic social and political growth as other nation states. But, while the benefits of a digital currency may be huge, the challenges – technical, social and regulatory – are also very significant. And the question of how these challenges can best be met is critical to every country engaged with a CBDC roadmap. The Bank of England is fully aware of this, and has recently published discussion and consultation papers on the subjects of both a retail and wholesale CBDC. It is also part of a new group, created by the BIS and consisting of several other central banks, with a mission to share experiences in assessing the potential cases for a CBDC in their home jurisdictions, considering economic, functional and technical design choices. Although the Bank of England holds the central role in designing and implementing a digital Pound (d-GBP), it is supported by the Digital Pound Foundation, which has a mission to assist policy makers in the creation of a well-designed Digital Pound (d-GBP) by bringing a broad spectrum of expertise and experience, producing exploratory pilot programmes, and providing technical insights. Initially conceived by members of the Whitechapel Think Tank, the DPF aims to create an inclusive and effective collaboration that fully examines the implementation of a d-GBP, and addresses not only questions such as the design, implementation and successful adoption of CBDC, but which also considers the wider impact of a digital Pound on the UK’s economy and society. The Initiative will also address, campaign for and provide constructive input in other key areas, such as privacy, financial inclusion and technology inclusion, and will consider the role to be played by a d-GBP in both enabling the UK’s transition to a digital economy and underpinning more efficient, sustainable payments. Quant supporting the DPF initiative. As a pioneer in distributed ledger technology, Quant’s experience of working with banks, inter-governmental organisations and private industry positions the company perfectly to contribute to the realisation of the Initiative’s vision. In particular, Quant is collaborating with the DPF to deliver interoperability: the ability to interoperate with the existing and emerging global payments infrastructure, as well as traditional means of payment (including cash and electronic money). Meeting this challenge is key to the success of a UK CBDC – or, indeed, any CBDC. However, a practical way of meeting this challenge has, until quite recently, evaded the industry. This is where Quant’s breakthrough technology is proving critical. The first and only solution to deliver true universal DLT interoperability, Overledger seamlessly interconnects private and public networks, enterprise platforms and DLTs, easily and securely at scale, without introducing complexity or additional infrastructure. By deploying Overledger, a CBDC such as the d-GBP can interoperate on a number of underlying DLTs and be used in cross-border applications, regardless of the DLT infrastructure. Already used in national and institutional infrastructure, Overledger enables any commercial bank or financial institution to integrate their core banking systems to all new networks of digital assets and CBDCs. Quant supports the DPF’s conviction that a digital Pound will be the first step in creating a foundational digital infrastructure that will underpin the next generation of the UK’s economy and society. The DPF, with the help of member organisations, such as Quant, who can provide valuable technology, experience and insights, will help to ensure the goal of establishing a d-GBP is reached as soon as possible, and with appropriate, collaborative guidance, oversight and direction.
Long
by FX_Professor
1