The notion of winning every single trade, as dreamy as it may seem, is not accurate at all for real profitable traders. There will always be negative trades, which is why traders must cut their losses short and let their winning trades run. To answer the “How to always win a trade?” question, we have to take many other aspects into account, and that is exactly what we’re going to do in this article.
How to always win a trade?
The best way to get frequent positive trades is to develop a trading system, which will be your only guide through your positions. Following a plan will give you consistency on your results, potentially giving you consecutive winning trades.
These rules can increase your chance of taking profits:
- Try using limit orders rather than market orders. Set your longs/shorts in pre-established support/resistance levels. This will place your order at the right price and, with a nice setup, your target will be reached.
- Do not act on emotions. Try to avoid volatility as a triggering factor for you to enter the market.
- Do not depend merely on indicators. Use the right tools for your analysis, always within reason.
- Try to find candlestick patterns that support your position.
Staying on the right side of probabilities is what makes a trader profitable. Considering the market has a cyclic behavior, you can use past price movements to speculate future trends.
How to maximize profits?
The secret behind maximizing profits lies in a healthy risk/reward ratio. Using a 1:2 risk/reward ratio will give you a winning margin, keeping you profitable even if you fail multiple trades.
For instance, let’s say your account balance is $100. If every trade risks $2 and profits will be taken at $4, losing 6 trades and winning only 4 will still give you a $4 profit.
Many traders manage risk differently, some even set a 1:4 risk/reward ratio to maximize profits even further. Risk management strategies have to make sense with technical analysis, as taking profits is vital to stay winning.
Cutting your losses short and establishing a wide profit margin is what will make your balance grow.
Should I use leverage?
Leverage is a great tool, but should never be abused. Over-leveraging dramatically increases your chances to get rekt, so never leverage all your balance at once.
If you’re willing to risk 2% in a trade, you could use leverage on that 2%, thus protecting the rest of your capital and maximize profits.
Leveraged betting will most likely burn your account, so it is fundamental to understand how to use it responsibly and watch over our capital.