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80/20 Rule
Have you ever heard of the 80/20 Rule, also known as the Pareto Principle? Dr. Joseph Juran developed the Pareto Principle after studying the work of Wilfredo Pareto, a nineteenth century economist.
The Pareto Principle states that a small percentage of your efforts (typically around 20 percent) will create a large majority of your results (usually around 80 percent).
Expanding Pareto to trading, it follows that roughly 80% of your profits should come from only 20% of your trades.
That means there will be numerous small whipsaw losses and gains, but 20% of the trades will make ALL the profits.
"...After several small losses it is human nature to feel like giving up. This is the psychological battle that market timers MUST win! "
Think how import that makes every trade!
After several small losses it is human nature to feel like giving up. This is the psychological battle that market timers MUST win!
The markets are powered by emotions (fear and greed). But trend traders use the changes caused by those emotions, to make their profits.
If you give in to those emotions, you lose!
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http://timing.typepad.com/timer/