How much does the average successful trader make per trade? Do traders in other markets earn a better return on their investment?
This simple, visual approach takes you from “here is my trade” to “how does a trader make money.” The model was created by the trading community at Trimaran.
The model is free to use. There are no ads, no fees, no subscription charges and you have the option to join any trading community you choose, and you receive a subscription monthly to use all the features of the trading model.
What Is the Pay Off on a Tradable Trade?
There are a variety of variables going into the success of any trade. There are many factors such as the price of the underlying assets, the order book, how long a trade lasts, and other variables; but as far as trading the stock market is concerned, just a trade being executed successfully is very different than the performance of the stock market.
The chart below shows a 10 year average return for 1 month on the stock market based on an average of 1,000 trades.
Notice the difference in performance of the year 2000:
The graph below shows how the stock market performance is affected by several factors such as the change in the market, and the effect of changes in the economy.
As you can see in the graph below, the stock market performance is much worse to the lower end of the market (the lower range). This should be obvious and it is a good measure of the performance of the market as a whole (the market as a whole has performed much superior to the overall economy and has not delivered).
The best way to analyze a stock market is to use the chart or data to answer a very simple question: How much can a trader make on a trade? If the answer to that question is “none,” then you should probably find a different trade (because the trade you are evaluating was unsuccessful). If your answer is “more than you can ever hope to make on a single trade,” then there is nothing wrong with the trade you made.
The best way to analyze any market is to use statistics to assess a stock’s market performance, and then use that data to ask the following questions: What percentage of trades are successful? How much money do traders make per trade? How much do they gain by trading a market over the long term?
This model is a good fit for most stock markets and will give you a simple answer to
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