Focus on the Few

Filed Under (Journal) by Casey on 04-04-2012

First let me share with you this video that got me thinking a few weeks ago…

Now I have already been aware of this principle but have never really applied this until i started looking at my forex activity…

The principle of it is very simple,  it is the law of the vital few, and the principle of factor sparsity which basically says that  for many events, roughly 80% of the effects come from 20% of the causes. http://en.wikipedia.org/wiki/Pareto_principle

There are so many example of this principle, for instances (from wikipedia)

80% of your profits come from 20% of your customers
80% of your complaints come from 20% of your customers
80% of your profits come from 20% of the time you spend
80% of your sales come from 20% of your products
80% of your sales are made by 20% of your sales staff

Therefore, many businesses have an easy access to dramatic improvements in profitability by focusing on the most effective areas and eliminating, ignoring, automating, delegating or re-training the rest, as appropriate.

Ok… these information is fine and dandy but how the hell should I apply to my forex activity?

Hmm… Let’s see if I can rewrite the above

80% of your profits come from 20% of your customers; the currency pair
80% of your complaints losses comes from 20% of your customers; my lousy forex ea
80% of your profits come from 20% of the time you spend; on forex trading
80% of your sales come from 20% of your products; [What product? Affiliate product?]
80% of your sales are made by 20% of your sales staff [Can’t find any relevance]

This kind of make some sense to me… I think…

So in forex sense, I need to find the right 80/20 ratio to maximize my performances. That is to say:

I need to focus on a few currency pair. 2? Maybe? Because that is where my profits would probably generate. On that currency pair/s I need to find 20% of all the bunches of EA that will provide me with 80% of my profits.

Subsequently I need to spend time on that 20% of my time on those 20% EA that matters on 20% of the currency pair available to yield me 80% of my forex trading profits…

Hmmm… that don’t add up to 100%

Anyway… I think I got the drift here…

Before I end this post… Here is an inspiring read… http://www.entrepreneurs-journey.com/397/80-20-rule-pareto-principle/

PS. Maybe it’s a good idea to only be affiliated with 5 reasonable good EA out there whereby one of those EA will make me a millionaire!! Muahahaha… 😀

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