Win Small but Often vs Win Big but Seldom

Hi a newbie here. I want to ask opinion regarding trading strategy. Statistically speaking, which is better in the long run? Winning small yet often or winning big but seldom? I usually in between day-trading and swing-trading.

I have been using the former strategy for some time. What I do usually is opening lot of trade, try to winning the trade not too much, say around 5-20 pips. Since it is easier to close such trade, the probability to win is relatively high. But in order to avoid fakeout I usually put a relative large stop loss, for example 20-40 pips. So sometime a failure will wipeout my previous several winnings. Overall these strategy seems to work but I don’t know if this is effective in the long run.

Then there are latter strategy which take the opposite approach. Instead placing wide stoploss, I will put a small gap, for example 20-40pips. And I will aim to win around 100pips. Statistically speaking, the probability to win a trade will be quite low (considering my current technical & fundamental analysis skill).

Do you think the latter strategy will be better?

Hello there and welcome, I have replied to a lot of questions like this from beginners and the question is almost worded the same. As an inexperienced trader, you must find what works best for you, try not to dig your heels in so quickly with a specific strategy or system. Until you call yourself a profitable trader, test all the markets, all the systems you want and then commit to the most effective system for yourself.

Everyone trades differently, people’s opinions are meaningless unless there is data to back it up. If you want to hold positions over a few days do it, if you want to scalp (be very careful) do it. Nobody can/should tell you how best to use your capital.

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It all depends on the strategy and your attitude towards it. Any profit is just a profit. This is the main thing.

As a beginner, the only thing you should be focusing on is your strategy. There’s no winning or losing, there’s just learning. A bad trade is not a loser, it’s a learning experience, an investment in your forex education.

Track all your trades in a journal and learn from your mistakes. Try to improve on those mistakes and build on your strengths.

Patience, discipline and experience. Only then will those big wins come.

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It’s good when both happen to you.
But even a small victory can be significant for you, if it is the result of a great job!

There is significant profit opportunity from both approaches IF you are opening a trade that follows a smooth consistent trend. Each needs an enhancement to work best -

Win big -
Basic plan - Use a wide stop-loss: ride the trend from start to finish.
Enhancement - Pyramid the initial trade as soon as it reaches break-even: pyramid the second trade when that reaches break-even. Etc. etc.

Win small -
Basic plan - Use a tighter stop-loss and take profits as soon as possible, such as on a r:r ratio of just 1:1.
Enhancement - Look immediately on exit for a re-entry on price weakness. As some re-entries will be at better entry prices after a pull-back than before, this offers the chance to make more pips from the same trend - some of your trades will “overlap”.

If you’re not getting into trends, these opportunities are not even there.

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The second.

The more operations you do, the more mistakes you can make. In addition, doing less operations has less commissions.

In my experience, it is better to focus on the quality of operations, even if they are a few, than not many bad ones.

When you just start trading, it’s cool to see a little regular profit, it serves as a certain motivation.
And over time, you’ll definitely be able to take some longer steps and you won’t have to worry about it.

For me it’s about the constant small wins, and that’s why I scalp small time frames. I am not someone who can forego small profits/losses for that 1 big one. I am not cut out for that kind of trading.