Trading help

[Tonto]

I'm not very experienced as you will find out in a mo.

I'm sure that no end of people must have asked this question before.

Suppose I back a horse.

If, the odds increase by 5% or more, I trade out for a loss.

If the odds decrease, I stay in the trade as long as the odds continue to decrease or until shortly before the off. Then I trade out at best odds.

In theory, I can't lose because I limit my losses to 5% but my winnings are unlimited and will probably average more than 5%.

I'm sure that this strategy is flawed but can't see how/where.

[marksmeets302]

You will probably find that your stop will get triggered just enough to offset the wins. Note that this can happen in this fashion: the price goes 10% in your favor, then reverse and still trigger your stoploss. So you will have much less wins than you expect - certainly not a 50% chance!

After a while your average profit will tend to zero, and that's excluding commissions.

[Tonto]

Thanks Mark for your response.

Much appreciated.