HomeHome SearchSearch MenuMenu Our productsOur products

Trading secret: Why the number of trades you win doesn't determine your trading success

by , 11 November 2015

Many traders obsess about getting a high win rate on their trades. They strive to bank as many winners as they possibly can.

But the fact is, you don't have to have a very high win rate to be a successful trader.

It all comes down to the way you manage your trades…

Why a high trading win rate isn’t that important 

Consider this scenario…
Two traders, Sam and Paul, have win rates of 70% and 40% respectively. Looking at these win rates, you may assume that Sam is the more successful trader, but you’d be wrong.
Looking at their trading returns overall, Sam has lost 25% whereas Paul has gained 30%. This is because Sam may have more profitable trades, but loses money overall, whereas Paul wins less than half his trades, but these trades are more profitable.
The crucial thing to note here is that you can win a lot of your trades, but large losing trades can wipe out those gains.

The key to successful trading

The way to ensure you win overall at trading is to adhere to strict money management rules, Tom Gentile in Power Profit Trades explains. There are three main aspects to this…
Money management rule #1: Risk
You need to limit your risk. The easiest way to do this is to stake a small percentage of your trading account on each trade, say 2%.
Money management rule #2: Be consistent
Trade the same amount each time. This could be a percentage of your account or a fixed rand amount. You may have an urge to up the stakes when you’ve had a winning streak, but don’t.
Money management rule #3: Follow your strategy
Only put on trades that your strategy flags up as a potential winning trade. Your analysis should tell you when it’s time to put a trade on. Don’t let other things interfere with this process.
By sticking to these rules, you should see your trading returns benefit.
So there you have it. Why the number of trades you win doesn’t determine your trading success.
*********** Best seller *************
Revealed: The ‘sharpshooter’ strategy that pinpoints companies on the verge of the biggest price climb they will EVER make
If you want the chance to make four, five, even TEN times your money using this ‘sharpshooter’ strategy — Click here!


Trading secret: Why the number of trades you win doesn't determine your trading success
Rate this article    
Note: 5 of 1 vote

Related articles

Related articles

Trending Topics