Analyzing the quote “In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten. ” – Peter Lynch
True, true, true… It’s all about statistics and probabilities.
The market is a chaotic system. It is fundamentally unpredictable. However, out of chaos, order is naturally born and the market forms patterns. Some patterns are important, others not so much. Patterns give us a blurry glimpse into the future. Understanding the logic behind these patterns and price action trading at analyzethisfx.com will give you a trading edge.
Your trading edge can never give you more than 10% over the standard market randomness of 50/50, provided that your risk/reward ratio is 1/1. You can play around with your risk/reward ratio of course but your trading edge cannot get better than 10%. The market cannot allow it.
These numbers are derived through statistical observation and one can never calculate them with absolute precision but they will give you an idea of what to expect when trading.