Tips and tricks on how to increase your trading win rate

Every trader enters the financial market with dreams of massive gains, inspired by stories of professional traders making fortunes like a degen.

But here’s a question: do these traders win all the time?  The simple answer is no.

Even the best in the business have win rates of only about 50% to 55%.

Embracing losses

In trading, just like in sports, it’s not about winning every single time.

It’s important to realise that losses are part of the game, even for the pros. So, successful trading isn’t about never losing—it’s about making sure your wins outpace your losses.

But how exactly can a trading strategy give you an edge, and what win rate do profitable traders actually achieve?

Balancing your win rate with a good reward-to-risk ratio

Risk-Reward Ratio = Potential Profit / Potential Loss

Believe it or not, professional traders don’t win every trade. Yet, they still manage to rake in significant returns. If you know how to manage your risk, you can achieve consistent profits with a win rate as low as 30% to 50%.

Understanding win rates

So, what’s a win rate? It’s simply the number of successful trades divided by the total number of trades, expressed as a percentage.

For example, a 50% win rate means you win half of your trades.

Many traders get fixated on their win rate because, naturally, everyone wants to be right all the time. But even top athletes like Lionel Messi in football or Maximilian Günther in Formula E racing don’t win every point.

Pay close attention to your reward-to-risk ratio, aiming for scenarios where the potential reward significantly outweighs the risk.

Imagine this: if you win 5 out of 10 trades, your win rate is 50%.

If those 5 wins earn you $1,000 and your 5 losses cost you $500, you still come out ahead with a net profit of $500.

This shows how even a 50% win rate can be quite profitable.

For a deeper understanding on reward and win rates, see this:  Forex risk: reward and win rates
Risk management plays a huge role here. Professional traders are masters at managing their risk. They use strategies like setting stop-loss orders to limit potential losses and take-profit orders to lock in gains.

Source: VT Markets

George Soros, a legendary trader, 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.”

In a nutshell…what does all this mean for you?

It means that being right half the time can lead to substantial profits if you manage your risk and develop a solid strategy with a favourable reward-to-risk ratio.

Not every trade will be a winner, but with smart risk management, your profitable trades can cover your losses and still leave you with an overall gain.

So, remember, it’s not about winning every trade—it’s about making your wins count more than your losses.This will pay off in the long run. With this mindset, you’re on your way to a successful trading journey.

Also, practice makes perfect. Need to backtest your trading strategy?

Open a FREE demo account now.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Shares product NVIDIA is about to conduct a share split after the market closes on June 7, 2024. Starting from the market opening on June 10, 2024, NVIDIA expects to provide investor trading in divided contracts.

After the share split, please be aware of the following:

1. The trading volume of NVIDIA open positions will become 10 times the original lot size.

2. The “opening price” and “take-profit/stop-loss setting price” of NVIDIA’s positions will become 1/10 of the original price.

3. NVIDIA’s price at the opening of the market on June 10 is expected to be approximately 1/10 of the closing price on June 7.

4. After the market closes on June 7, all NVIDIA pending orders in real accounts will be cancelled.

5. After the market closes on June 7, all NVIDIA orders in the demo account will be cancelled, including open positions and pending orders.

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

New contracts will automatically be rolled over as follows:

Please note:

• The rollover will be automatic, and any existing open positions will remain open.

• Positions that are open on the expiration date will be adjusted via a rollover charge or credit to reflect the price difference between the expiring and new contracts.

• To avoid CFD rollovers, clients can choose to close any open CFD positions prior to the expiration date.

• Please ensure that all take-profit and stop-loss settings are adjusted before the rollover occurs.

• All internal transfers for accounts under the same name will be prohibited during the first and last 30 minutes of the trading hours on the rollover dates.

If you’d like more information, please don’t hesitate to contact [email protected].

Famous for his principles in value investing, mainstream media regard Warren Buffett as one of the most successful investors of all time. Buffett runs Berkshire Hathaway (Symbol: BRKB), one of the favourite stocks for many investors in the world. 

But there is an alternative school of thought challenging that Warren Buffett’s principles are “old school, obsolete, unrealistic and unsexy”. 

Buffett’s principles and his lifestyle 

Keywords of value investing principles are “long-term”, “patience” and “value”. Very much slow and steady. And people tend to forget that Buffett started investing when he was 10 years old, and he has since then been consistent until today. With an average ROI of 22% per year and compounding power, it is easy to see why Buffett ends up being one of the wealthiest people on the planet. 

Realistically though, how many people start investing at the age of 10? Probably no one else apart from Buffett himself. 

Modern day lifestyle, inflation and debt  

Consider an alternative scenario where Buffett only starts investing when he was 30, whereby he would have been drowned with student debts from pursuing a master’s degree or PhD. With a regular job, he is only left with some USD500 a month after deducting the necessities. At the same ROI of 22% per year, he would end up with 99.9% less even after a period of 30 years.  

There is just no way Buffett would be labelled as “the most successful investor”, even if he had been disciplined in his investment journey based on this alternative scenario. 

The truth is that most people belong to this alternative scenario rather than being born as an investment prodigy who would start at the age of 10.  

Add inflation into the picture and the ROI would be eroded to somewhere between 15-18% per year. Growing your wealth with a small capital and at such a speed is just not enough to keep up and live a decently happy life, much less to achieve financial freedom or becoming rich. 

Value investing with little money down does not make any sense 

Once again, consider yourself as an individual in the alternative scenario mentioned earlier. With just USD 500 spare cash a month and a long-only strategy, it is not easy to salvage a bad entry point, especially if you entered at the highest point of the market. It is also mentally painful if you decide to practice dollar cost averaging (DCA) when the market is crashing, as the more cash you invest, the more your portfolio will be bleeding. Sometimes it takes half a decade for the investment to break even. And the investor would already lose out to inflation too. For nothing. 

What a pain. 

An average joe with just USD 500 spare cash a month also must diversify. Playing the all-in strategy means you go big or go home. Buffett can do concentrated positions because he has the holding power, but truth is most people do not have such holding power. Choices are needed in certain occasions, and if one asset class is down, people do need another asset class to cover back the losses. And that is just how reality works. 

A lot of flexibility is what helps the average individuals 

This is where CFD trading becomes very appealing to many. Flexible, small and quick – just like a ninja.  

Make money no matter the market is bullish or bearish 

In CFDs, you can choose to bet if the market is going upwards or downwards. If the market is crashing, you can simply choose to follow the trend and short the market, making money when everyone else is bleeding.  

Fast in fast out equals healthy cashflow 

Most CFD traders practice intraday trading, and positions would be closed quickly to avoid overnight risks. Such practice also allows for healthy cashflow for a regular person. There would be no necessity to have your USD 500 cash stuck for extended periods of time.  

Lower barrier to entry with leverage 

With leverage of up to 500:1, CFDs also offer a lower barrier to entry – you only need to put up a small sum to gain full market exposure. 

With a starting amount of USD 500 and leverage of 500:1, you can open positions of up to USD250,000, which can potentially amplify your profits. With Warren Buffett’s methods, you will have to earn the spare cash of USD250,000 first, which is not really viable to many. 

Diversification of markets you can expose yourself to 

You can gain exposure to forex, commodities, bonds, shares, indices and ETFs via CFD trading. It is easy to hedge or diversify with CFDs. 

So, is Warren Buffett lying? 

Perhaps from his own perspective, Buffett is not lying per se. But his methods are unrealistic and cumbersome for anyone without USD 1,000,000 in cash lying around waiting to be invested.

Once a while, everyone would want a cup of latte or boba tea, travel to another country, celebrate little moments in life, and just live simple happiness. Life could feel meaningless if every single penny saved must be invested and had to be locked for at least half a decade. 

Start CFD trading with VT Markets 

With 1000+ assets being offered in the form of CFD trading, there is nothing to stop you from living the lifestyle you desire. Start your financial trading journey today! 

Open a live account 

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].