Working Out Your Success Rate

Filed under: Learn Forex Trading |


In order to work out what your success rate is when trading the forex markets, you have to consider a number of things. On a basic level, you could just have a ‘win rate’ and work out the percentage of your trades that reach their profit target. However, if you are using trailing stops, then this will muddy the waters. What really matters is how much profit you make and how much your trading bank grows by. However, it is also useful to know the winning percentage of certain types of trades.


For example, if you primarily trade inside bars, pin bars, and engulfing patterns (like I do), then it is useful to know whether one of these setups is more successful and thus more profitable for you than the other types of setup. In order to work this out, you must keep a record of each and every trade, including the trade type. Then you can figure out how profitable you have been on each type of trade over a long series of trades. And, if one of the setups is making a loss for you then you could cut it out of your trading arsenal altogether.


At the moment, I am thinking about always have a risk-reward of 1:2 on each trade, because with having a larger risk-reward scenario, you are lowering your winning percentage. Although having a higher risk-reward can be more profitable in the long term, this depends on your personality type and whether you can take a large volume of losses. Personally, I prefer more of a 50-50 split, which is why I am coming around to this way of thinking. What risk-reward scenario you take is entirely up to you. However, just remember that it will affect your success rate.

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