investing math
 image


 graphic

Join my newsletter (learn more)       General | investing math    






About this site
Learn about investing in financial markets. I am trying to add new articles, information about inves...
Learn more


  • General
  •    » Technical analysis
       » Fundamental analysis
       » Intermarket analysis
       » Japanese Candlesticks
       » Money Management
  • Stock market
  • Foreign exchange
  •    » Forex strategies
       » Forex Journal
  • Options
  • PAPER trading
  • Platform reviews



  • Investing blogs

    + The Visual trader
    + Commodity Trader
    + Market Rider
    + Stock Insight
    + The Kirk Report
    + Long Term Investment Strategies
    + Short-term trading
    + Wily Trader


    Forex for beginners

    + Play/test with $25


    Entrepreneur blogs

    + Guy Kawasaki
    + Business Advice Pro


    Investing Games

    + Investing Experience


    Learn to do your maths


    Tags -             

    Before you get into actual investing, be sure to put down your expectations about possible ROI ( return of investment ). And most importantly, learn to do it right. I was just asking about the possibility of making 3% of your capital per day in one forum. The answer was that it’s not really possible with stocks. I claimed that 2%...how is it not possible – lets say you have $100k to play with, you make 10 trades per day, you manage to make 7 trades out of 10 winning ones. Each trade in average makes you 0.5%. 7*0.5% = 3.5% and 3 losing trades – 3*0.5%=1.5%. Total 2% ROI per day, considering the average on both winning and losing trades is 0.5%.

    Everything seems to be right...right? No. Think again. That’s far from the truth. This can only happen if with every trade you use your whole capital which never is a good idea. As this means you’re risking 100% of your capital with every stock you buy.

    Instead, lets get more realistic. Ideally you divide your capital between 10 different stocks, so in this case $10k for each stock. You win with 7 of them and lose with 3 of them. 0.5% of $10k is $50. Seven times $50 is $350. Lets now take off the loss of $150 and we get to the total of $200. And this is not 2% ROI anymore but rather 0.2%. Notice the difference? It’s all very logical but these are the very simples mistakes each of us can make without much thinking. Lets make sure you and me won’t do the same mistakes again.

    Note though but with forex things can be a bit different thanks to the 1:100 leverage. But here you also must consider the higher risks.

    Learn to do your maths!


    Now what? Digg it  |  Add to My Yahoo  |  Add to Google Reader  |  Add to Del.ICIO  
    Comments (0) / Link to this topic - http://www.learning-to-invest.com/
    Learn-to-do-your-maths--25.html




    investment advisory
    www.thedtscorp.com -

    Forex trading systems

    #1 Time-tested Forex trading system, with DOCUMENTED PROOF, that has the potential to turn $1,000 into $1,000,000 in just 24 months. Limited-Time Offer Price: $97

    #2 Powerfully Effective Forex Trading System That's Shocking Professional Traders Around The World......Completely Guaranteed To Generate 83-114-157 Pips A Week! Price: $97

    #3 Two Forex trading methods which have been hidden for years, known to only a small group of Wealthy Trading Elite! Grab 100's of pips weekly by spending only a few minutes a day at your computer! Price: $97

    #4 These Ruthless Trading Tricks And Tactics Instantly Transform You Into A Profit-Making Machine Scoring Wining Trades After Winning Trades. Price: $97

    #5 The AWARD WINNING "work from home" solution by someone who used to work for the Deutsche Bank as a forex advisor. Price: $198 (50% coupon available)

    latest submissions
          » Volatility is your friend

          » Tips from successful day traders, Part 3

          » Tips from successful day traders, Part 2

          » Tips from successful day traders, Part 1

          » Make money not debt

          » Make money not debt

          » No skills? Free online trading school is there to help you

          » End of month and need a loan?

          » M&T e-Money Market

          » 5 Traits of Highly Effective Financiers

          » Great forex product reviews

          » It's all about money management

          » What is going to happen next?

          » Brutally honest analysis of yesterday

          » USD at its lowest levels of 2 years

          » Testing time, Day 3

          » Testing time, Day 2 UPDATE

          » Testing time, Day 2

          » Testing time, Day 1

          » My own trading plan

          » Technical indicators - Aroon, ATR, CMO, ADX

          » Creating a trading plan

          » Results of the trading competitions and next week

          » Trading rules - something new to think about

          » Forex strategies: Short term strategy

          » The game of probabilities

          » What can you learn from poker?

          » Elliot wave - guidelines for wave framework

          » Introduction Elliot Wave Principle & Fibonacci ratios

          » What does Straddle mean?

          » Forex platform review: Easy Forex

          » How to find and confirm a trend?

          » Different look into trading and life in general

          » Introduction to Swing Trading

          » Introduction to 1-2-3 Trading Method

          » More trading rules

          » Candlesticks – the importance of Gaps

          » Sakata’s Method / method of Munehisa Honma

          » Money Management

          » Candlestick Continuation Patterns

          » Forex and intermarket analysis

          » Candlestick Reversal Patterns III

          » Forex strategies: The Sidus Method (EUR/GBP and EUR/USD)

          » Forex strategies: Big Ben Strategy (GBP/USD)

          » Foreign Exchange: Carry Trades

          » Candlestick Reversal Patterns II

          » Candlestick Reversal Patterns I

          » Introduction to Japanese Candlestick Charting

          » MACD histogram

          » The Three Moving Average system

          » Technical indicators: Williams %R indicator

          » Technical indicators: Parabolic SAR (Stop & Reverse)

          » Common sense trading rules (Michael Jenkins)

          » Geometry for predicting market behaviour (Michael Jenkins)

          » Emotional vs rational trading

          » Competition: First Day’s thoughts

          » Trading competition, 4 weeks

          » Bollinger bands

          » Relative strengh indicator - RSI

          » Introduction to Intermaket analysis III - global markets

          » Introduction to Intermaket analysis II – related markets

          » Learn to do your maths

          » Introduction to intermarket analysis

          » Introduction to technical indicators II

          » Introduction to Technical indicators I

          » Recognizing chart patterns II

          » Recognizing chart patterns I

          » More on volume & OBV

          » Introduction to charts

          » Learning from winnings AND losses

          » What are sideways movements?

          » Importance of volume

          » Introduction to Dow’s Market trends

          » Bull Market and bear market

          » Who is Charles Dow and why should you know him?

          » Stock background search

          » Introduction to stock options

          » Forex - pips, spread, margin, leverage

          » Basic introduction to Forex trading

          » What is Pattern Day Trading

          » Signs a company is going bankrupt

          » How to analyse stocks and forex?

          » Which online trading platform to choose?

          » How do I set my financial goals

          » Investing basics - think before you act

          » Learning to invest




    Buy Silver
    goldmoney.com - why buy silver from goldmoney? all customer silver is insured and audited. open a free account to buy silver.
    buy future payments
    investment advisory

    Privacy Policy | All rights reserved © Learning To Invest 2006, Email: / investing math