( this is THE understanding that will set you apart from the rest ! )
|This is the infamous formula for approximating the time it will take for a given amount of money to double at a given compound interest rate.|
$100 will DOUBLE in 6 years if earning a compounded annual rate of 12%.
72 (magic number) divided by 12 (rate of return)
equals 6 years (repeating event) to DOUBLE.
|The Interesting Part of this FACT is:
if your REPEATING EVENT is your TRADES .....
then you only need a 12% Rate of Return (per trade)
on 6 TRADES to DOUBLE Your Money !!
NOT YEARS !!!! TRADES !!!
|You can hang around hoping and trying to make the "big one", or you can simply make a lot of little trades and still come out way ahead without the exposure during periods of high volatility.|
|Remember - if
you only profit 10% per trade,
you will DOUBLE Your Money in just over 7 Trades!!
The Math: 72 / 10 = 7.2(trades)
Try it, take $1,000 and multiply it by 1.10 and then 6 more times. You will nearly DOUBLE your $1,000.