00:00Can a trader with a 70% win rate also lose money? Absolutely, because just looking at the win rate is not enough.
00:07It happens
00:07Suppose you took 10 trades, made profit in 60 trades and lost in 3 trades, that is enough to hear.
00:15It feels good doesn't it
00:16But what if the loss from these 3 losing trades exceeds the total profit from 7 winning trades?
00:23So even if your win rate is good, it can have a big impact on your account. This is where position sizing is important.
00:31it becomes
00:32This means that the quantity in each trade should not be decided solely on the basis of confidence.
00:38Let's say your trading capital is тВ╣5, you set a small and predefined portion for yourself.
00:46Which is to be used for risk in a trade, then according to the same risk limit and risk of the trade
00:52The quantity of the position is decided from
00:55Its biggest advantage is consistency. Just because you have a lot of confidence in a trade does not mean that
01:04The position should also be very large.
01:06And if there has been a loss in the previous trade, then to recover it, increase the quantity of the next trade.
01:13Not the right approach at all
01:16So remember, win rate tells you how much you are winning.
01:21Position sizing tells you how much each trade will impact your account.
01:26This is why two traders using the same strategy can see completely different results.
01:33So don't just look at the win rate, look at the position size as well.
