Don't Focus on Wins and Losses

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Don't Focus on Wins and Losses

You can’t visit a Forex site these days without seeing an advertisement for some strategy that promises a 98% win rate.


Why is that? Is it because a high win rate is needed to become a successful Forex trader?


Not even close!


They do it because it sells. People love to win, there’s no denying it. If you’ve ever played sports or watched your favorite sports team on television, I’m sure you can relate.


Those behind the so-called strategy that produces an advertised 98% win rate know this and exploit it to make money.


Nobody is going to be enticed to spend money when they see a headline that promises a 50% win rate.


But what if it’s a strategy with a proper risk to reward ratio that aims for $300 for every $100 risked?


At a 50% win rate, that’s a 20% gain on a $5,000 account over the course of 10 trades.


Successful Forex traders know this. They have realized long ago that it’s not about winning a high percentage of the time.


It’s about maximizing the amount of money made on wins and minimizing the amount of money lost on losers.


As George Soros once said…


“It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong”.

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