System Trading
We believe there are 4 main reasons why more than 80% of all first time investors in the futures market lose money:

· - Under capitalization
· - Emotional decision making
· - Not having the time available to implement a complete strategy
· - Trading systems not matched to the investor

Most investors have trouble controlling their emotions when it comes to trading. FEAR and GREED affect a trader's ability to keep focused on their trading plan. The FEAR emotion may result in cutting winners short and letting losing trades run (in hopes that the losing trade will come back to a winning position,) or when FEAR of a winner turning into a loser prompts the trader to exit a trade prematurely. GREED manifests itself in a trader when he or she increases a position or fails to follow exit signals on the emotional belief that this trade will be a “home run.” In many instances, the hardest trade to make emotionally turns out to be a large winner, and because of FEAR and GREED, it doesn’t get executed. SYSTEMS provide an alternative to the emotional swings that can sabotage good traders--they remove the human element from trading.

Evaluating Systems - Maximize Efficiency
There are over 1,000 trading systems available to purchase on the retail market today. Investors need a way to evaluate these systems effectively. At BT Trade, we often use our Efficiency Ratio To separate the good trading systems from bad.

The Efficiency Ratio - Our Key Analytical Model
This proprietary ratio is based on the concept that if you maintain a 2 to 1 risk to reward ratio and keep your win to loss ratio at 50%, it's a mathematical fact that you will double your money every year! If your win to loss ratio drops to 37% and you maintain the 2 to 1 risk to reward ratio, your trading will still break even. If you have a system you would like BT Trade to evaluate using this method, contact us for further information.

Minimum Account Size Recommendation
Multiply the maximum draw down by 1.5 and add the margin requirement Keep in mind that this would give you the minimum account size, NOT BT Trading's recommended account size.

 

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