Trading - Dice Game Example
Only a Roll of 2 and 6 Pays Out
A roll of only 2 and 6 pays 3 pennies, but it cost 1 penny to roll the dice. This is a great example of risk/reward and why your strategy is so important. If you can lose a penny on every roll to make a 200% return on investment, roll on 2 and 6, than you understand the basics trading.
Optimally we strive for a 300%-400% return on investment, but it depends on your risk/reward scenarios, and trading instruments. This is key learning before you start trading. You have to be willing to take losses to profit from the Market.
This is the only field, where winning 25%, means you are making money!