Developing traders often set goals to improve their trading by winning more of the time. That last word (time) is worth a minute of discussion.

There are two ways that the word “time” is often referenced when it comes to winning.

First (and more commonly) it is referenced when talking about win rate. A phrase you’d hear in this case might be “this setup wins 72% of the time“.

Secondly (and my preference) is to talk about actual time — you know, the kind we measure with clocks and calendars. The phrasing used here would sound like “this strategy has won 19 out of the last 21 months”.

If you think this is semantics, please stay with me for another minute.

What if I told you that top traders often only win 40% of their trades but win more than 90% of their months?

Many traders think the best path to improvement is to close more winning trades than losing trades. But that is only one very small part of the story. The rest of the story is measured in key performance metrics such as expectancy, max drawdowns, time in drawdown, and many others.

When you begin to use better metrics to measure your trading, you increase the probabilities of winning more of the time. 

This idea along with many other topics will be covered in the SMB Course: Intro to Probability-Based Trading.

Andrew Falde
SMB Trader
[email protected]