Forex Trading Stats – A Case Study Of My Trading
I like to bring positive vibes to trading. I want to inspire and educate traders around the globe. That makes me feel great. I get a lot of positive feedback.
However, some people seem to hate that for some reason, and I can't do anything about it (except accepting this as a fact)
This article has been inspired by a Twitter conversation with one of my top haters:
“He says his win rate is 60-70% swing trading forex. This CAN'T be true because of the way forex markets are.”
This gave me the idea of exploring in greater depth my Forex trading stats and share them with you.
The purpose of this is to demonstrate that Forex traders all have different trading stats and that statistics do not mean much by themselves.
A Forex trader shouldn't be stressed about his win rate or average profit because different methods will lead to different statistics.
Can you really judge a trading plan by its win rate?
Should you always aim for a Reward-to-Risk of 2 or more?
No, not always.
Trading is an art, and if you know what you're doing and have tested it, that counts more than anything else. You do need to ensure, however, that what you do makes logical sense (i.e. not risking 20% of your account on a trade).
My Forex Trading Stats – A Case Study
I don't consider this private so here are my Forex trading stats:
Those statistics come from MyFxBook, which I highly recommend to any Forex trader.
Explanations Are Coming…
I want you to pay close attention to those stats, because according to “common trading knowledge” (the nonsense some coaches talk about), my stats are bad.
Let me explain those in details…
- What most traders do not understand about the win rate, is that it varies according to your strategy and increasing it shouldn't be your #1 concern.
- My win rate for 2016 is (at the time of writing this article) 67%. That means I win 2 out of 3 trades on average.
You need to think about one thing, though. The trades I “win” aren't always full profits. They might get closed near break-even since I use A Simple Trade Management Strategy To Get More Profit. That, over time, increases my win rate.
And after all, a higher win rate is easier to endure than a lower one.
- This is where the trading community would scream (but I don't). I hear them say “Etienne!!! Your average win in pips is smaller than your average loss in pips!“.
- Indeed, I average 97 pips for my winning trades and 114 pips for my losing trades.
That is a common misconception. I do not care a single second about pips when I trade for two reasons:
1. I look at my profit in terms of percentage.
Whenever I'll take a trade, I won't even look at the pips I'm risking because I see no point doing it. I'll just accept whatever pip risk I have and adjust my position size according to that risk.
For every trade, the value of 1 pip will vary.
2. I trade multiple time frames.
Think of it…
If I enter a trade on the 15-minute chart and earn 17 pips and enter another trade on the 1-hour chart that produces -56 pips, I'm in “pip deficit”, right?
That's often what happens
The thing is, what if my risk was 1% and my Reward-To-Risk 2 for both trades?
My return would then be (2% – 1%) = 1%
It would be positive!
Hence, it explains why I make money without counting pips. More info can be found in one of my very first articles The Money Management Principle Most Traders Don’t Know About.
What this Average Win/Average Loss statistic is saying, however, is that I've lost a few trades where the size of my stop loss in pips was big. That doesn't impact my return at the end of the month.
You NEED to understand that professional Forex traders do not care much about how many pips they won or lost.
That's not their jobs. They are much more concerned about their return in terms of percentage.
Avg. Trade Length
Even though I've mentioned that my trades are frequently based on multiple time frames, you see with this statistic that I tend to keep them an average of 2 days.
That's right. Keep in mind, however, that the account I'm showcasing here is a purely swing trading account. Whether I enter a trade on the 4-hour or 15-minute chart, my target will be set according to the daily chart.
In this article, I studied the major stats Forex traders often care about.
But let's get back to you…
What are your Forex trading stats saying? Are you too focused on them? Comment below or in the Facebook group and we'll discuss!