Beginners often make the mistake of thinking that good traders should win 9 out of 10 times. In reality, legends have a win rate of about 40-50%. The secret is not in the win rate, but in the risk-reward ratio (R:R).
🔸 Win Rate Mathematics: make 10 deals:
A beginner wins 9 ($1 each), loses 1 ($10). The result is -$1 loss.
A professional loses 6 ($1 each), wins 4 ($3 each, R:R 1:3). Result +$6 profit.
👉 A professional loses more often but increases their account. A beginner wins often but loses everything due to one mistake.
🔸 In business, you pay rent. In trading, losses are mandatory business expenses. As long as costs (losses) < income (profit), you are profitable. Don’t try to eliminate costs entirely; it’s impossible.
🔸 Trying to win every trade creates fear of making mistakes. You refuse to cut losses and take profits early.
👉 This leads to a recipe for failure: Cutting winning trades early while allowing losses to run.
🔹 It doesn't matter whether you are right or wrong, but how much you earn when you are right compared to how much you lose when you are wrong.
Stop aiming for a 100% win rate.
Focus on R:R 1:2 or 1:3. Even with random selection, a good R:R makes you profitable.
If a trading system has only a 30% win rate, but each winning trade brings 5 times more risk (R:R 1:5), would you dare to trade it? Would you quit after 7 consecutive losses?
News is intended for information, not investment advice. Please read carefully before making a decision.
