Online, you’ll often read about Forex trading advertisements that boast ofmore than 90% winning trades.

Sounds great doesn’t it? Would you pay $100 for a trading system that may win 90 out of every 100 trades?

If you answered “Yes”, you’re in trouble!

Unfortunately, the truth is that a high winning percentage has little to do with being a profitable trader. In reality, it’s easy to have 90% of winning trades and still lose money.

Don’t believe me? Go ahead a search online search for the “turtle traders”. If you’re familiar with them, you’ll know that they are very profitable traders with only a 20% winning trade percentage.

Allow me to explain

Imagine you make 10 trades in a month, and 9 of these trades are profitable for $1 per winning trade. This means that you have a winning percentage of 90%, with $9 in profit.

And if you have only 1 losing trade out of 10 (i.e. 10% losing trades), but you lose $10 on that one losing trade. In total, you would have lost ($9 – $10) $1 among all your ten trades.

Can you now see why a high winning percentage doesn’t mean that you’ll be a successful trader? You see, it’s not about how often you win, but how MUCH you win.

So don’t fall for the marketing tricks

Many advertisers use high winning percentages as a sales tool to get you to buy the trading systems they are selling. They know that traders like to win all the time, and who doesn’t like to win often? These advertisers try to appeal to everyone’s desire to win, and unfortunately many people fall for their trap.

Conclusion

It’s easy to have 90% winning trades and still be a losing trader. At the same time, you can have a low winning percentage, but be a very profitable trader. In reality, winning percentages have very little to do with a trader’s success.

So don’t fall into the advertisers’ trap when you see their “high winning percentage” claims next time. When people use high winning percentages as a sales pitch, chances are that they know very little about what it truly takes to be a successful trader. Be careful!

Simplicity – Always keep your trading systems simple. Too many information at one time on your trading screen could confuse and delay your decision to trade

Broker – A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.

Sample the Environment – It is important to remember that many registered and online trading agents have fictitious platforms which mirror the real-time, live platform clients register and trade on. It is not only advisable, but it is also actively encouraged to initially open a ‘dummy’ account where fictitious forex trades can be undertaken that closely reflect what real trades may be like when they are eventually undertaken. Such platforms are designed to give those that are new to forex a feel and an idea what real trades on live markets will be like when the decision is made to begin trading.

Buy low, Sell high – Forex trading does not involve the physical purchase of the currencies, but rather involves contracts for amount and exchange rate of currency pairs. The potential for profit comes from the fluctuations in the currency exchange market. Regular daily fluctuations in the value of one currency against another give a clear advantage over conventional stock market equities and instruments. See Trading Illustration Only

Manage Losing Positions – Trades will sometimes inevitably on occasion go against you. It is important to accept them as an inherent part of trading. Cut your losses and move on having learnt from any mistakes made. Always remember however that you will not be able to trade without losing some positions. It is important to manage these well.

Patience – Do not over-trade your account. Good money management practice is important and will help with profitability. This will go a long way in helping you develop a strategy which fits with your personal trading capital. Operate a trailing stop loss policy say 15 to 20 pips behind the trade. Minimise your good trades as long as you are confident.

Flexible Mindset – Don’t set yourself false targets and expectations. Experts will tell you trading is not an exact science and setting oneself unattainable targets will only lead to frustration and feeling of failure when these targets are not met. Always maintain an open mind. The market is a constantly changing environment tunes your mindset to understand this.

And lastly but definitely not least, it is most important for all market participants to remember that unique experiences and past performances do not guarantee future results. Trading results can vary in any combination of circumstances. If you do not have extra capital that you can afford to lose, you should not trade in the foreign exchange market.

Invest wisely and take advantage of the resources and technology available to you in the market