Ways To Create Profitable Cfd Trading Strategies
May 3, 2016
But there is this issue in buying lotto tickets as an investment technique. These two ratios are risk reward ratio and the hit rate.
Lotto Against Contracts for Difference (CFDs)
Learn more about the 7 most essential trading tips and 2 of the most common CFD trading strategies.
By: Jeff Cartridge
Article Directory: http://www.articledashboard.com
Find out more about the CFD revolution by checking on CFD Trading Tips.
If we were to play Lotto 3,838,380 times then we would expect to win once and lose 3,838,379 times. generally speaking, buying tickets in lotto is not a good CFD trading strategy. This means that we are to win $10 million and lose about 38,383,790 times. Luck will fall on some people in lotto but successful CFD trading isn’t about luck; it is all about exploiting great opportunities.
For this to become a profitable investment the odds would be over 90% that the Crusaders are to win the game. The risk reward ratio involved is exceptional at 1 million to 1. In 2008 a gambler placed a $100,000 bet on the Crusaders to win a game at odds of just 1.08. If a winning Lotto ticket requires 6 correct balls out of 40 possibilities, then the odds of winning are 3,838,380 to 1.
A successful CFD trader will find a CFD trading technique that skews the odds in their favor and then implement that technique to produce profits.
In the Super 14 rugby series the Crusaders has been dominating for the last ten years winning about 7out of the 10 series. Rugby against Contracts for Difference (CFDs)
Understanding the connection between 2 significant ratios is the key to having winning CFD trading strategies. If the odds were only 95% then the gambler would lose only one out of the twenty games so that he would earn $8,000 times 18, $152,000, and lose an amount of $100,000 only once. You can consider this a lousy edge ratio with the reward ratio of about 8 to 100 and a potential large loss for a very small gain. This means that if the Crusaders won the gambler would have received a payout of $108,000, making a profit of just $8,000, but if they lost the gambler would lose $100,000. There are only a few investments that have this kind of risk reward. This could be a profitable strategy as an investment technique even if the risk reward is lousy if the hit rate is high enough to justify the said investment.
Many people have bought lotto tickets once in their lives, but is this really the way to riches? The risk is very low, let’s say $10 for a ticket, while the reward is potentially huge, with first prize being many millions of dollars, say $10 million. It isn’t about the risk reward; it is the hit rate. But the probability of the Crusaders winning the game is very high.
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