The Pathway
Building a Trading Plan & Strategy (Long-Term Success)

The Core of a Winning Trading Strategy (Building Your Edge in the Market)

Complete & Continue Next Lesson Learn More

📍 What Is an Edge in Trading?
An edge is what makes your strategy profitable over hundreds of trades, even if you don’t win every time.

✅ It’s Not Luck – Winning traders don’t rely on “hunches” or guessing.
✅ It’s Not a Holy Grail – No strategy wins 100% of the time.
✅ It’s a Probability Advantage – A small statistical edge compounds into big profits over time.

Example:

  • If you win 55% of trades with a 1:2 risk-to-reward ratio, you’ll be profitable in the long run.

  • If you lose 45% of the time but your winners are double your losers, you still make money.

➡️ Your goal isn’t to win every trade—it’s to make more when you win than you lose.

📍 The 3 Pillars of a Winning Trading Strategy

1️⃣ Market Structure & Smart Money Concepts

  • You need to know where price is likely to go.

  • Break of Structure (BOS) & Change of Character (ChoCH) – Key shifts in momentum.

  • Order Blocks & Liquidity Zones – Where big players enter and exit.

2️⃣ Risk Management & Position Sizing

  • If you can’t control risk, you won’t last.

  • Keep risk per trade under 2% of your account.

  • Focus on high-risk reward trades (1:2 or better).

3️⃣ Trade Execution & Psychology

  • A perfect strategy is useless if you don’t follow it.

  • You need discipline to enter & exit based on rules, not emotions.

  • Master patience – Most traders lose because they overtrade and chase setups.

📍 How to Define Your Edge in 3 Steps

🔹 Step 1: Identify What Works Best for You

  • Are you better at price action, fundamentals, or indicator-based trading?

  • Do you prefer quick trades or long-term positions?

🔹 Step 2: Backtest & Track Performance

  • Keep a trading journal to see what setups make you money.

  • Analyze data: Which trades work most often? Which ones fail?

🔹 Step 3: Adapt & Improve Over Time

  • The market changes—your edge must evolve.

  • Don’t blindly follow rules; analyze, refine, and optimize.

🔑 Key Takeaway:
A winning strategy isn’t about having fancy indicators or complicated setups. It’s about having a consistent process, risk management, and a repeatable edge that works over hundreds of trades. If you’re just hoping each trade wins, you have no edge—and no chance.