I originally posted this in the Foundation section of the Mentor Program but I thought it was too good to leave there.
One of the key psychological and emotional roadblocks that new traders have to get over is that the number of winning trades you have does not matter. What matters is how much on average you make per trade. If this is a high amount you can get away with a low winning percentage. If you make very little per trade, then the pressure is on to have a very high winning percentage.
The simple table below looks at the wining percentage at which a trader is profitable based upon the amount per trade they make. For example if you only make $500 for every $1000 you risk then you have a hit rate of greater than 65% to make any money. Conversely, if you make on average $2000 for every $1000 you risk then you can be profitable at hit rates below 35%.
