80/20 Rule or Pareto Principle in Stock Market Trading

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One has to understand the efforts applied vs the returns received and same has been amply demonstrated in Pareto Principle or 80/20 Rule or the vital few vs. the trivial many - basically this is the observation that everything in life is distributed unequally. A minority of a company’s customers are responsible for the majority of revenue. A minority of customers are responsible for the majority of complaints. A minority of the population owns the majority of the wealth. This observation is present just about everywhere.

Similarily this law is also equally applicable in stock market where more than 80% of your profit comes from 20% of your trades and 20% of your profit comes from 80% of your trades. So apply the effo9rt in correct direction to get the maximum profits.

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