Trading Reports

Want to Improve Your Win Rate?

A short trading lesson, but one with a practical focus for improving your win rate.

One of the most frequent questions I get asked is how can I improve my win rate?

My response... show me your last 10 entries.

The common problem I see with those struggling with a low win rate (less than 35%) is an inconsistency in their entries.

Sometimes their trading a breakout on a cross of the line of least resistance, other times their buying within the base on a bullish candlestick, and other times I don't know what they were doing... nor do they.

Not only is there an inconsistency in terms of the entry position, but also the characteristics of the candlestick and volume bar.

One of the common mistakes I see is the amount of entries were they have bought a breakout candlestick which shows a large supply shoot. Obviously, a large supply shoot isn't what you want to see at a breakout - so why buy it? Also buying springs which don't clearly display demand is the dominant force.

On your next 10 or 20 trades I'd encourage you to do the following to improve you win rate and/or to become aware of the sub-optimal entries you're taking.

Before you enter the trade, make a note of how bullish you think the structure is from 0 - 10. With 10 being extremely bullish.

Also do the same for the breakout candlestick and associated volume bar.

Although this seems a simple exercise, and it is, it'll have the effect of bringing awareness to your trading and helping to avoid mistakes (taking sub-optimal entries). Once we have awareness we can begin to put measures / plans in place. Ignorance is not bliss when it comes to trading.

What I think you'll find is most of your losing trades will of been rated lower, 6's and 7's. Whilst the majority of your winning trades will be from the more bullish structures and breakout / spring candlesticks + volume bars. 

I find greater success when I exercise patience and only trades from structures, candlesticks and volume bars that I rate 8 and above.

Let me know if this exercise helps you over your next 10 - 20 trades.