Trevor Neil, a well-known figure in the trading world, once ran a hedge fund with a surprising statistic—his trading strategy had only a 25% hit rate. That means out of every 100 trades, only 25 were profitable. Yet, the fund was highly successful.

Why does this matter? Because most traders assume that to be profitable, a strategy must have a win rate above 50%. Trevor’s story proves otherwise. And if you’re someone trying to understand how professional traders think, this story might change your perspective.

The Story of a 25% Win Rate Hedge Fund

Trevor Neil was closely associated with Tom DeMark, a legend in technical analysis, best known for the Sequential Indicator—a tool once exclusive to Bloomberg terminals costing $25,000 a year. Today, it’s available on many trading platforms.

When I asked Trevor about the Sequential Indicator, his eyes lit up. He shared a fascinating story about how he and a colleague moved to South Africa to trade one-minute charts on South African stocks.

Most professional funds don’t trade such short timeframes, but what stood out wasn’t their strategy—it was how they turned an "abysmal" hit rate into profits.

Turning Losses into Wins: The Secret to Their Success

Despite their low 25-30% win rate, they made millions. Their secret? Risk management and trade expectancy.

When they were performing well, their hit rate would rise to 40%.

When things weren’t going well, their hit rate dropped to the mid-20s.

But regardless of win rate fluctuations, they always ensured that their winning trades were significantly larger than their losing ones.

Their approach was simple:

They only stayed in trades that worked immediately. If a trade didn’t move in their favor right away, they exited—no hesitation.

They kept their losses small. If they bought at 50 and the price dropped to 48, they were out.

Their winners far outpaced their losers. While they lost 75 trades out of 100, the 25 winners made up for it multiple times over.

The Mindset of a Professional Trader

This story is an eye-opening reminder that trading success isn’t about having a high win rate—it’s about risk-reward balance, discipline, and mindset.

Most traders struggle with fear—fear of losses, fear of missing out, fear of making the wrong decision. But true professionals operate differently:

They act without fear. They know losses are part of the game.

They are patient. They wait for the best setups instead of overtrading.

They grow into their trading skills. Success doesn’t happen overnight—it’s a journey of progress, setbacks, and growth.

Final Thoughts: Believe and Act

If you want to trade professionally, embrace patience and discipline. Trading isn’t just about strategy—it’s about building the right habits and mindset.

Be patient with your learning process.

Be patient with your trade entries.

Let your confidence and skill grow over time.

In the end, it’s not about following someone else’s strategy. It’s about finding a style that resonates with you, mastering risk management, and developing the mindset of a true professional.