Trading is very very statistical!

Today was a pretty dry day for trading, the markets did a lot but for my trading setups not much really happened.

My per-trade loss limit is $70, what that means is if I lose $70 on a play then the trade went as planned. The trade made today was a -$70. I realized after that I made a judgement call mistake, I did not take the market into consideration during this play. The market had broke through the resistance and was just resting, not really going up but just resting. When I was looking at the charts it gave a small illusion of possibly going up but not a big one. So I entered the trade. It was a clean and quick loss. I feel like I disregarded the market during the trade to a certain extent. But honestly, consistency helps. One thing that I know is that I will not LOSE more than what I need to lose per trade. My losses will always be capped off to the AMOUNT I choose to lose. So If I am risking $70 per trade I know I won't lose more than $70, its nearly impossible. The only way I will lose more than $70 is if I don't follow my trading plan. It is easy to handle losers the most difficult part of trading is maximizing winners. Basically trade management. During trade 2 weeks ago I was down about -$250 in one day, now that is disgusting. That is when all plans, rules and everything else goes down the drain.

Here is how I operate: 

I have a $70 Risk per trade. I consider this my "R"

Which means if I lose -$70 on a trade I am down -1R for that trade.
If I win $70 on a trade I am positive +1R for that trade.

Below is an example of a trade I took last week displaying the R system. In this trade I made +2.11R which means if my R was $70 the trade would have been a +$147 trade in dollar terms. And these types of trades are the normal trades, if they are managed right it is possible to be pulling in 1.5R-2R plays at least daily. But it is all in the management.

This is where it gets FANCY: 

If I operate at a 50% success rate in my trades and I make about 20 trades a month here are the stats for
that:

So right away I know that out of 20 trades I am going to have 10 losers. Now if I cap my losers to $70 that means I lost about -$700 on my losers. That means on my losers I am down -7Rs.

Now here is where it gets fancier, if for example I have 10 winners and all of my winners are say average +$130 which is about +1.85Rs then my winning trades amount to +$1295 or +18.2Rs

Do the math I can operate at 50% success rate, with 10 losers and 10 winners a month I can still be in the positive: $1295 - $700 = $595 Profit or about +8.5Rs 

The thing with trading is you DO NOT have to be right 100% of the time, the stats show that I only have to be right 50% of the time and all I need to do is manage my winners and not worry about my losers because I know I will not lose more than -$70 ever on a trade.

Trading is very statistical, one must understand what level is he or she operating at and then develop a strategy.

Here is today's trade!

I tried to long it above the red line but the trade didn't follow through, so I cut it.

Trade tickets + daily P/L for today. -1R