Why 90% Win Rate Systems Are Dangerous for Forex Traders

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#564: Why 90% Win Rate Systems Are Dangerous for Forex Traders

In this video:

00:26 – Do you want a 90% win rate system?

01:48 – A traders comment about a high win rate strategy.

03:15 – Focus on the quality trades.  

05:05 – My 17 minutes Masterclass and Book a Call.

05:15 – Blueberry Markets as a Forex Broker.

05:55 – Comments, Like & Subscribe.

As a Trader. Someone gave you a system that had a 90% win rate. I bet you’d want to trade it. The reality is, you should not trade a 90% win rate system. I’m going to explain why right now.

Hey there, Traders! It’s Andrew Mitchem at The Forex Trading Coach with video and podcast number 564.

Do you want a 90% win rate system?

So you heard me right. If I said to you, hey, I’m sure you love my system, that’s got a 90% win rate, I. But you’re going to make lots of money and you get. Yes. Please give it to me. The reality is that you’re probably not going to make money off of a system like that.

Now, if you’ve been following me for any length of time, you’d know the story I told a real true story from a few years ago where someone came to me with a 90% win rate system, and they were very excited and it all looked really good. The problem was that they were losing lots of money because their focus was on win rate.

They were having, let’s say, out of ten trades, they were having nine out of ten trades hit their profit target, hence a 90% win rate system. But the trouble is they were making lots of small little gains. And every 1 in 10 trades had a massive loss that wiped out all their gains, plus lots more. And so that becomes the, the reality of it.

You know, you’ve got to be very careful with win rate. Don’t put all your focus into that because you’ll end up not doing, you know, what you should be doing, which is looking at things like control, risk, high reward to risk, looking at what the market’s doing at the time, looking at the pair you trading, the current conditions, all those type of things that mean that there are so much more to having a successful trading system than simply having a high win rate. High win rate is not necessarily good and in most cases is not good at all.

A traders comment about a high win rate strategy.

And this issue resurfaced just yesterday when I had someone come to me with something very similar to this. And I just need a high win rate system because that’s going to make me feel better and and it’s going to make me trade better.

And I tried to explain to them, look, the end of the day, you’ve got to make money out of your trading. That’s the important thing isn’t it? So why not focus on making money and doing it trading properly, than just being completely glued and fixated on this one thing? Because you find that with the people with 90% win rates, they do these crazy things like having there reward to risk run the wrong way, or have very structured and rigid, profits and stops which generally are not in their favor, as in they may have, let’s say that pluck some figured that this guy, you know, a 50 pips stop loss and a 20 profit target.

Now, if you know the way I trade, we never talk pips. But unfortunately, the people with the high win rate systems do. And so that’s their issue is they keep getting stopped out. And that reward to risk is not good. Or they’ll do something like they’ll have, a ten pip profit target and 110 pips stop loss. And you know, nine out of ten trades go well.

You’re one big one loses. And so having their focus around the wrong way is something that they don’t realize until they trade live. And they see that this 90% win rate system does not work

Focus on the quality trades.  

For me, focus on low and controlled risk on every trade. Forget about pips and ensure you have high reward to risk trades. Focus on trading with strength and weakness.

Now just yesterday I held a live European session webinar with my clients and we had the perfect scenario setting up. On the bigger picture daily bias. We were looking for some weakness in the New Zealand dollar and lots of strength in the US dollar. That’s exactly what we saw. And so when we’re looking at currency pairs, we were suggesting that ideally we should be looking at selling the New Zealand dollar against the US dollar if suitable trades present themselves.

Now just on that live webinar at the beginning of the session on the two hour charts, I took a sell trade on the NZD/USD, a beautiful continuation pattern. The market had dropped and pulled back looking like it was going to drop down again. We took the sell trade and within one hour we had a profitable trade.

At the end of the webinar, which was 5:00 am Eastern Standard Time, New York time, the three hour charts closed and we had a fantastic sell trade again on the NZD/USD on the three hour charts. And so we profited from both positions by trading the pattern, having high reward to risk. They had something like about a 2.8 to 1 reward to risk, and the trades were both profitable.

So, we have our risk control. We have a high reward to risk for trading the patterns we’re trading with the bigger picture strength, the weakness, analysis, everything. All the all the factors that we look for were all suggesting you have to take this sell trades. And that’s what we did. And that’s what we, profited from those.

So that to me has a far more significance in terms of, your overall profitability and common sense within your trading and then just focusing on, hey, I need to 90% win rate system.

My 17 minutes Masterclass and Book a Call.

Now, if you’d like to find out more about how we do this and how we can help you to become a successful trader, have a look at my 17 minute On Demand masterclass. I’ll put a link to that here.

Blueberry Markets as a Forex Broker.

And if you’re out there looking for a quality forex broker, I can highly recommend Blueberry Markets. They based in Australia, and you can open an account from pretty much anywhere in the world is a few countries that they cannot take, but pretty much everybody else they can take. And I strongly suggest you have a look at their MT5 platform.

It’s the one that I use. And I’ve been using Blueberry Market since they started. They’re a great bunch of people. great spreads, great communications, very fast, fun withdrawals as well, and a massive array of markets on their MT5 platform. I’ll put a link to blueberry markets here as well.

So, hope that helps. Make sure that you focus on the quality of your set ups and your overall strategy, and remove that focus from having to hav