The only thing you control - is the size of the loss. We will NEVER take big loss at the OEC.

We do not need a "high win rate" to be successful traders. This is an important concept to understand; I've seen traders spend years seeking the "ultimate trading strategy" that has a high win rate and these same traders were still not profitable years later.

You Will Lose $$

All traders will lose $$. That is a fact. All trading strategies fail. There is no system or strategy or approach that will get you 100% winning trades (or even consistently hit +95% winning trades).

To become a successful trader you need a combination of good money management, good behavioral control, and a decent trading strategy. Simple enough, right?

Control

The only thing we have in our control is the loss we take; we get to decide what the loss will be before the trade is taken and this is a concept that so many traders fail to grasp.

We can not control the win rate or the loss rate, we can not control which trades will continue to run and which ones only offer a few points.

We can try to improve the success rate by focusing on "high conviction plays" and trying to avoid "random walk" trading but even high conviction trades can lose. Even when we get a good trade setup - the trader has to manage it well and not get out too soon or stay in too long.

Trading Stats

Things in trading are connected - like the connection between our win rate and our risk to reward. These two concepts are inversely related; the higher the risk reward the lower the win rate. You can do better than the Risk Reward mentioned below - but use that one as a starting point!

We want to continuously focus on the daily RR levels to monitor our trading. All traders get sloppy or begin taking additional risks which can lead to poor trading results. To avoid slipping into this rut a trader can monitor their daily RR values to identify when this "slipping" begins to show.

There is a "HOLY GRAIL" to trading statistics; this mythical statistic is trading with a win rate greater than 50% while consistently hitting a "risk 1 to make 2" RR metric. Sounds easy enough, right?

Most traders don't have the ability to hit a consistent 1:2 RR and that is only part of the problem; a trader still has to also hit a 50% win rate!

This is in focus at the OEC; of course going beyond these levels is a goal that all traders can seek in their life but new traders looking for guidance and structure will want to keep that concept in focus at all times:

50% win rate with a 1:2 RR

Do this - and your goals are closer than ever!

Self Harm

Most new traders I see take one of two approaches in trading the futures; both are harmful. One type of trader attempts to use the smallest stop possible while the other type of trader uses such a wide stop they may as well be using no stop at all.

There is nothing wrong with trying to keep the losses small by utilizing a small stop; but at various times in the trading day this approach will very likely get you stopped out.

The other approach (with no stop or a extremely wide stop) will give the trade room to play out - but without the background to understand where a stop should be and at what point a trade is no longer considered a good trade - this type of trader will often give a loser too much room and take losses far greater than their average winner.

We want to grow into the proper stop size - either by finding our average win size or by testing out various exit strategies until we have one that fits our approach.

Your Stats

In trading - one trade does not define us. We want to look at the trading averages and look at what we are getting “on average.” When calculating your average - you get a sense of the “average profit” and the “average loss” which gives us a sense for the average risk / reward we are trading.

High Win Rate