The base winning percentage of your trades is determined by the ratio of how close your stop-loss order is to to your profit-taking target. It’s possible to increase your winning percentage by choosing profit taking targets closer to the current price of the stock while at the same time increasing the distance of your stop loss orders. To select your base winning percentage, choose your stop loss and profit taking orders in the very specific manner shown below:

Look at the entry point and decide how much to risk on the trade (e.g. stock at $50 and a stop-loss order $2 lower at $48 a share.)

Use the exit strategies of your natural trading style to set your profit taking order (e.g. Just Win is a 50% chance of winning so a profit taking order $2 higher at $52 a share)

Stop loss and Profit taking orders are exactly the same distance away from entry price, so a 50% chance of winning

If all trades were made this way, the expected base winning percentage would be 50%

Use the chart below to see the the ratio between stop loss orders and profit taking targets

As can be seen, Expected Winning Percentages come with tradeoffs and limitations which we’ll dig more deeply into in later lessons and throughout your time with us.

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