The secrets of win rate can be life-changing for lots of beginner traders. Most of the reputed trading books, as well as influential traders, suggest that you should make your trading strategy, and the strategy should fit with your personality. However, the experts and books don’t mean that you must use a separate indicator or try various timeframes. They indicate that the dealer should think about adjusting all the parameters around their techniques to make it psychologically less stressful.
The trading areas are heavily impacted by the way a trader exits, stops, or targets a trade. Some crucial issues like the holding duration, trade duration, difficulties recovering, the frequency of losing trades, and the volatility of the account directly affect the psychology of the trader. In this case, you have to think about your trading profile – your strengths, weaknesses, and techniques that fit well.
How Can You Control Your Win Rate?
1. Risk: Reward Ratio And Win Rate
Let us assume that the winning rate of your trading strategy is 50% with 1:3 risk: reward ratio. You have to observe the ratio closely. Look at the win rate – it is only 50%, while the risk: reward ratio is 1:3, which is indeed attractively profitable. This ratio will provide an immense return. Nevertheless, the trader can modify his strategy to explore various options and to improve the system. He should adjust his new techniques to his psychology. Always remember, the risk to reward ratio is the key factor that will allow you to take trades like an Aussie trader. Feel free to visit this website and learn more about money management.
2. Smaller Targets And Higher Win Rate
The relationship between your targets and success rate is an important factor that a Forex trader must know about to improve his winning rate. Target and win rate have a direct relationship with each other. The way you take profit or stop loss controls the winning rate of your strategy. Nobody can ever get a higher risk: reward ratio and a higher win rate trade at the same time. Most people try to achieve both of them by breaking the system. Logically, a higher reward: risk ratio system has a lower success rate, and no one can do anything about it. If you are going to attain a higher risk: reward ratio and winning rate, then that will not work.
This is why experts opine that the system and the strategy must fit the psychology of the trader because some businessmen want smaller winners but frequently, while some others prefer to have bigger winners with a lower success rate. Both of these situations are right because it depends on your psychology.
3. Wide Stop-Loss And Win Rate
In this case, let’s make all the parameters constant expect stop-loss order. A wider stop-loss order will lead to a higher winning rate because, with wider stop-loss, the market price will not reach to the stop-loss so easily. Even if the price move against you, the movement will get near your stop-loss order. In this case, the reward: risk ratio can fall as the stop order is greater.
4. Tight Stop-Loss And Winning Rate
In the meantime, you may have an idea about a wider stop-loss and the price movement. Now, think about the tight stop-loss order. What will happen in this case? It is obvious that the movement of the price can easily cross the limit set by you. A closer stop-loss order is very easy to reach. As a result, your winning rate will fall. In this situation, your winning trades will be greater with less frequency.
Conclusion
It is important to figure out whether your trading strategy fits you psychologically or not. To improve your success rate in the Forex market, you have to know how a professional Forex merchant executes his strategy. However, there is still enough room for your improvement if you don’t want to think about designing the win rate and reward: risk ratio. Experienced merchants suggest that beginners should maintain a better combination of higher success rate and lower risk: reward ratio so that they can have frequent successful traders.
