“You have to figure out how to make money being right only 20 to 30 percent of the time.” – Bill Lipschutz
Winning percentage.
How much does it really matter? It’s an often argued point amongst traders.
Can you only have a 20% win rate but actually end up netting more than someone who’s right 80% of the time? It’s absolutely possible and important to understand.
Because remember, this game is about our net profit…
Not about our winning percentage.
We could win 8 trades in a row but take a loss on our 9th that wipes everything out. It’s not uncommon.
While some other trader might have 8 consecutively wrong trades but the losses were super small…
Then on their 9th and 10th trades they end up winning pretty well.
Their winning percentage looks worse, but their net profit looks better.
Now that doesn’t mean we don’t want to be right as often as we can…
It simply means we strive to lose as little as possible when we’re wrong…
And profit as much as possible when we’re right. That’s the game.
Easier said than done I know.
But not being stuck to our own ego-driven winning percentage helps us become much more aggressive and unemotional about cutting our losses when we need to.
We know the end goal, no matter what it looks like getting there.
Because here at TPT you know the deal…
Once you’re there, you can withdraw it from day-one in PRO.
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Take Profit,
James
