7/8 Analysis: 50% win ratio can still be profitable
At the London open, the JPY (yellow line) is clearly the strongest currency and momentum is coming into the market as the line to the far right is starting to turn back up.
The AUD (orange line) and GBP (red line) are the weak currencies and starting to turn back down again.
- AUD/JPY SELL
If we placed our pending order 10 pips below the opening price, the pair moved 16 pips in our favor before reversing. Normally, on a breakout strategy like we teach we are going for 20 pips of profit so you would not have hit that profit target before the market went back up.
However, because we trail our stop 20 pips behind the price we only would have taken a loss of 4 pips compared to the original 20 pips we had at risk.
This is a great example of how we minimize losses on trades that don’t prove to be profitable.
Let’s look at another trade for today:
- GBP/JPY SELL
The GBP/JPY which we identified as a good pairing on our indicator earlier did move down far enough to profit as it moved a total of 35 pips.
So, the profitable trade was +20 and the losing trade was -4. The importance of this is that even with a winning percentage of only 50%, you would have been profitable 16 pips.
When you watch the entire video analysis below, I’ll show you what professional traders do that is dramatically different than amateur traders that allows them to profit at will in the Forex market.
You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.
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