Money Management vs. % of Success in Trading Systems

I've noticed in many threads on this site and others, many people tend to focus their research on creating TA systems that have high win-to-lose ratios (what I'll call '% Success'). Although the topic of the importance of money management has been discussed, it seems to be discussed far less than it should be.

With this in mind, I decided to do a little study of various risk-to-reward ratios based on a single TA system - a relatively simple daily breakout approach. Whether you would ever employ this trading approach yourself is not particularly important in terms of the final conclusions that the study produces. Obviously R/R is only one aspect of money management... but it’s a pretty major chunk of it.

Simply put, the obvious conclusion that came out of the study is this:

Risk/Reward ratios easily outstrip % Success in producing profits from trading systems.

Obviously, this is no new fact to experienced and educated traders. My hope is that by showing the results of this study, those relatively new to trading will learn that it is important to develop an understanding of money management and R/R before spending a lot of time trying to develop a trading system of their own (or to employ anyone else's, for that matter).

I'll explain the exact system I used, how it was back-tested, etc., in the following posts... There's a fair amount of info to be discussed here, and I'd rather break it into chunks than have a single massive post.

I've attached an excel file to this post that presents the resultant data, wrapped in a zip (see below). There should not be any macros or such, although there are quite a few charts of data, and I'm not sure if those employ macros or not. Reagrdless, I do believe my local system to be virus-free, so hopefully we don't have to be very concerned about such issues.

Sheet 1 shows all of the actual data that was produced, and Sheet 2 has a presentation of all of the graphs of the data, laid out for comparison. At the far right of Sheet 2 there are some summary notes for each R/R group.

I hope we can all benefit from this work, and I look forward to learning more about this subject from those who know more than me. And please, let's keep the thread clean, be respectful and respectable, and have an educational, informed conversation.

The Tested System:

 

1. Find the highest high and lowest low from 0:00GMT to 6:00GMT (including 0:00GMT and 6:00GMT bars)
2. Add a ‘entry gap’ (EG) to the highest high and lowest low values to obtain long entry and short entry levels.
3. Place a long and short order at these levels at the start of the 7:00GMT bar (requires a broker that allows hedging). Set stop loss (SL) and take profit (TP) levels on both orders.
4. Go to sleep / work / the golf course and wait for the day’s action to occur. Don’t remove your Short order just because the Long order is triggered, and vice versa (no OCO). Don’t re-enter a Long or Short after one has been opened for the day (ie, max two trades per day, one Long and one Short).
5. At 23:00GMT, if there are still orders open, close them at the open price (or as close as possible) of the 23:00GMT bar.<o> </o>

I’m not presenting this system as the be-all-end-all daily breakout system, or even a good one for that matter. I’ve used it for this study because it allows for certain conveniences in back-testing procedures. It is my opinion that any trading system will produce similar results in terms of the impact of risk / reward ratios on overall profit… but I’m happy to have someone show me a system where this is not true.

The three variables employed for back-testing the system are the following:

 

1. Entry Gap level
2. Take Profit level
3. Stop Loss level

The spreadsheet details the exact EG / TP / SL levels that were employed. To summarize, EGs from 10 pips to 100 pips were lightly tested using a standard TP / SL level (50/30), and also using an ‘all equal’ approach (EG = TP = SL). After these quick studies, 20, 30, and 40 pip EGs were tested much more heavily, using 1:1, 1:2, 1:3, and 1:4 risk/reward ratios. Generally I used a range from 10 through 50 pip SLs, employing 10 pip increases in TP levels and utilizing whatever SL was required to produce the desired R/R ratio… so long as it fell between 10 and 50 pips. In 1:1 R/Rs, I did allow the max SL to increase to 100 pips, as the 10-50 range only produced 5 data points.

Back-testing Procedure:

This system was back-tested on GBPUSD 1 hour data from 1/2/2004 through 8/31/2006, or a little more than 2 ½ years. Not a huge range, but its what I have available. Anyone who’d like to contribute more data is more than welcome to contact me via PM.

The testing software is an .ASP application I hand-built for this study. Creating the back-tester myself allowed me to be sure I knew exactly how the results were being obtained, and to have a high degree of control over the rules processing.

The rules for back-testing follow the system rules detailed above, so I won’t restate them here.

A spread of 0.0004 was employed on all trades. This seemed a median value for what various brokers offer.

A 1:100 Leverage was assumed. The ‘Final Balance’ column in Sheet 1 of the spreadsheet represents the profits obtained using a 1:100 Leverage… however, the ‘100’s of pips’ column could be easily employed to calculate profit levels for any leverage amount.

Samples of results were visually tested in charting software to ensure that the program was in fact producing valid results (within the known limitations of the back-testing procedure).

Known Limitations of the Back-Testing Procedure:

 

1. All back-testing systems are unrealistic in one way or another. So is this one.
2. The data used is from a single source, represents a relatively small timeframe (2 ½ years) and is known to contain gaps.
3. The initial bar that triggers an entry is not tested for hitting that entry's SL, as there's no way to know which was hit first. As such, tests runs with very small SL's (less than 20 pips) can be considered highly suspect. The level of suspicion decreases as SL’s increase.
4. On the other hand, the higher the TP level, the greater the number of 'still opens' that remain at the end of day, getting arbitrarily closed at the 23:00GMT bar Open price. This creates a type of statistical 'loose end’ where true success (TP being reached) or failure (SL being hit) is never achieved. As such whether a ‘Still Open’ is closed in the green or in the red is not included in the % Success results. Instead, the total pips made or lost are simply added to the running balance. If I were to run these tests again, I’d add a feature to track % Success of Still Opens – but unfortunately that was not part of this version.
5. Widening spreads and margins due to times of increased volatility can’t be accounted for in any back-testing system that I am aware of. This one is no different.

Due to the above reasons and more, this series of tests can in no way be considered empirical. The exact numbers shown DO NOT represent the actual results one might have gotten if they’d traded this system’s rules for the last 2 ½ years. Instead, they represent an approximation of those results. I have no means of assessing how close that approximation is.

What they DO show is some very definite patterns in terms of how heavily risk/reward ratios affect profits, as well as how little % Success determines actual returns when good R/R ratios are not employed.

Results:

The highest profits were obtained by utilizing 1:3 and 1:4 Risk/Reward ratios. The absolute highest profits returned were obtained at 28 pip SL, 110 pip TP (1:4 R/R) with a 20 pip Entry Gap (10449 pips). Note that the % Success of that system was a mere 24.63%.<o> </o>

Second and third place for highest profits fell in the 1:4 and 1:3 R/R categories, with 28pip SL / 110pip TP / 30pip EG taking second (9855 pips), and 40pip SL / 120pip TP / 20pip EG taking third (9721 pips). The % Success of the former was 26.11%, and the latter 26.39%.

The highest % Success results consistently fell in the 1:1 R/R, ‘all equal’ group, and always produced profits on the low end of the scale. First place: 80 SL / 80 TP / 80 EG, with 65.52% success and only 3736 pips profit. Second: another all equal: 100 / 100 / 100, at 65.22% success and giving the second lowest profit of the study at 2277 pips. Third: 70 / 70 / 70, at 63.92% and 3661 pips. At best, these high % Success systems produced 35.75% of the profit that the most profitable system produced, despite succeeding 266% more often

As a side note for those who do play daily channel break systems, it seems the lower the Entry Gap between the max high/low channel, the more profits were produced. This would seem to provide an answer to the question of whether is it more logical to provide a wider gap to prevent ‘false triggers’ of breakouts or if its better to get in closer to the channel and therefore hit your TP level sooner (with the latter apparently being more effective in producing profits).

I *have not* done thorough tests of 0 pip or 10 pip Entry Gaps, but after these results it would seem a good idea.

<o></o><o></o>Conclusions:

 

1. Utilizing powerful Risk/Reward ratios is fundamental to making profits off of any trading system in the FX market
2. % Success alone is not the most important factor in determining the validity of a trading system
3. When employing daily breakout systems, its better to get in closer to a high/low channel and therefore hit your Take Profit level more easily than to employ larger gaps in hopes of only triggered trades based on “solid movement.”

<o> </o>

BEFORE THE FIRESTORM STARTS let me say I’m NOT convinced that these test results are correct, that the conclusions I’ve made necessarily follow, that the back-testing system I built accurately represents the reality of trading, or that the data employed is fully reliable.

I’d like for people to tell me where they think I may have gone wrong (hopefully in a constructive manner) so that the tests can be refined and that the results can more closely represent the truth. I present all of this as fodder for conversation, and none of it as irrefutable fact.



*taking a deep breath*
<o></o>

I'm not at all surprised by your results. They are very similar to what I've found as I've tested various systems and what my results have been during my trading career.

The next step, imho, is to look at various position sizing models. Moving from fixed contract to fixed fractional will show what a solid R:R model can really do.

This isn't in reference to your study but as I'm sure many here understand pip counts aren't the best measure of a system unless you are trading fixed contract.

Nice work here. Hopefully it gets as much attention as the lastest "free" system being touted.

Thanks for doing this. It is an on paper - in your face eye opener and produced the result intended in me.

Could you clarify, el Capitano? I'd love to better understand what 'fixed fractional' means.

I have to say, I hope it gets far more attention, and not for the same reasons that such systems, always promising 80 or 90% success, get attention.

But then again, I guess that's the central point.

And thanks for taking the time... I've read your posts many a time, and always learned something new.

-miscon777

Couple of questions that were not immediately obvious, apologies if I missed something:

1) Are the bars these are tested on hourly?
2) What pip value did you use for the results?

There's a lot to read there, and I apologize in advance...

1) Yes, the bars tested were hourly.
2) I have to admit, I'm confused by the question. My program tested whether any part of a bar after the bar that triggered an entry was equal to or less than the SL for that entry. It also tested whether any part of a bar was equal to or greater than the TP level... again, after the bar that triggered the entry. If either the SL was hit or the TP was hit, I took the loss/profit at the value of the SL or TP that was set when the order was 'placed' ( 7:00 GMT). On both ends, a spread of 4 pips was asssumed and included.

Again, I aologize if I've missed the point... feel free to clarify so I can understand better and refine the model if need be.


-miscon7777

Miscon-

Thanks very much for doing this survey. I'm sure there are hundreds of people who just said "wow!".

Anyways, to clarify what a previous poster was speaking of when they mentioned "fixed fraction", it's basically just risking a constant % of your equity. I'm sure you're familiar with the concept, just not the name. If you had a $100k account and decided your fixed fraction would be 2%, you would risk $2k on your first trade, $1960 on your second, etc.

Ok, like each pip is worth $10 or something? That's the way it looks.

Hi miscon
Try this site, has good explanation of MM methods, and you can try the system and backtest your results for best returns.
http://adaptrade.com/Articles/index.htm
Peter

sterling work miscon
thank you

i hope your posts on this thread are made a sticky

Hey Miscon777

Nice job and thanks for putting a lot of work into this and sharing it. I would be very interested in seeing the 10 pip gap results, as I use 10 when playing daily candles for entry.
How does the spread calculate with EG though? I.e. if the high/low was say 2500, do you use entry at 2520 for EG=20 or do you use 2524 for entry as that includes spread? Or is the EG always 10/20/30/40 etc and THEN spread gets deducted, so the ACTUAL REAL PRICE from the broker is really 16/26/36/46 from the last high/low?
That matters a bit more when using only 10 as EG, as a real break especially on daily tends to need a bit pippage I use to think...but if it doesn't matter due to the R/R and MM working out in your favor, then that would be interesting to see. Hence my interest for the 10 results.

Thanks for sharing!

Minute: yes, with the 1:100 that was assumed, each pip is worth $10... but there is a column called '100s of pips' in the spreadsheet that shows actual pip amounts instead of dollars... and its that column that gets charted along with % success.


SeekingLight, to use your example, I used 2524 for entry... the spread is calculated into the actual buy/sell levels directly, as opposed to being deducted after the fact.

I do hope I can continue this work with the 0 and 10 pip spread, as you recommend... as well as taking a look at some even higher R/R ratios such as 1:5, 1:6, and perhaps beyond.

Loki, thanks for the clarification on "fixed fractional." You were right... I'm familiar with the idea, but didn't know the term for it. Its the other big part of "Money Management" that I simply did not deal with in this study, and highly recommend that anyone interested in trading look in to.

PeterFM, thanks for the apaptrade.com link... got to run off to the office, but I'll definitely check that out when I get in tonight.

Thanks all for the early support!

Miscon777, A person using Yahoo ID MoneyQuest2005 or similar was doing pretty much that system.

He was buying, every push through I tried it myself, works well on news days, but end of the day the Chop was killing the system, unless you've got amazing exits, which include making 100% of available profit.

He ofcourse, always claimed after the event to of sold the very top / bottom, despite there being huge counter moves, he'd hold through, to get 20pips extra on a rally.

Was funny LOL

I see Loki beat me to the punch. I probably should have said fixed percentage. I think it is a more commonly used term.

PeterFM posted the adaptrade link already so I won't do that again. That is great resource. Michael's software is very good as well.

I didn't mean to pull off topic but position sizing is such a big part of all of this that I felt it was worth mentioning.

As an example of what I was refering to for others that are reading:

Using some results from post #4. 1st place went to a 28 pip S/L with an 110 pip T/P. While 1st amongst the 1:1 crowd went to 80 pip S/L with an 80 pip T/P.

Looking at just one trade, it's obvious that with a fixed contract (say 1 standard lot) you make 30 pips/$300 more with the 4:1 ratio. That's 37.5% more profit.

Now, if we use fixed fractional/fixed percentage we'll make a bit more. Let's say we use 2%. That means we are going to risk 2% of our account spread over our stop loss. If you have a $10,000 account you risk $200.00. If you have a 20 pip stop that means your position size is 1 lot (assuming GBP/USD for an easy calculation).

That means our 1:1 trade will generate a 2% gain. Our 4:1 winner will generate a 7.8% gain. That's 390% more profit.

I think all of my math is correct. Someone feel free to jump in if I made a mistake.

The obvious reason this is important is that you make more money. Another reason this is important to mention is that some systems will make more pips around a 1:1 ratio. Someone recently posted some profit stats for a system on a private forum I belong to. Something like a 70 s/l and 80 pip target produced the most pips. When you applied fixed percentage position sizing, however, 20 s/l 100 t/p made more profit but less pips. This is what I meant when I said pip count isn't always the best measure.

Hope some of this is helpful.

I use Adaptrade and couldn't think of trading without it. They have a 30 day free demo so give it a shot, be be warned you will be very sad if you allow it to expire.

Adaptrade looks brilliant... haven't started the demo yet, but the articles alone are excellent - looks like just about everything you could want to know about money management, all in one place.

Decided to play a bit with the fixed fractional thing... whipped up a little spreadsheet to calculate lots required, balance growth, etc., at 25% and 33% success and 1:4 / 1:3 RRs. I made it fairly easy to alter so you can play around with it yourself - just change the blue fields in the first row of each sheet to match your system / account.

Once again, the actual $ balances shown at the bottom are not realistic... Just to make things fast and easy, to effect 25% success I just logged 3 losing trades followed by a single winning trade, and then repeated the pattern 25 times (100 total trades). This type of regular repitition would never happen in reality, and whatever patterns of wins and losses happened would completely change the running balance, and thus all the rest of the figures (most importantly, lots bought/sold per entry to achieve desired fractional loss). Same thing with the 33% Success shown on Sheet 2 - just two losers followed by one winner, repeated 33 times (99 trades).

I used a 1 pip = $1 dollar system (1:200 leverage, if I'm not mistaken), because 1:100 leverage required lot sizes of less than 1 (0.7, etc), and I don't believe that brokers allow for fractional lots. Perhaps someone can confirm or deny this?

You could easily use this to track your own trading to determine lot sizes on a running basis... which if I guess correctly, is just one of the features that Adaptrade's software would provide. Phil, perhaps you could fill us in?

Anyway, just playing around... let me know if I bungled any computations herein.


-miscon777

Excellent work!

The only comment I would have on the results is that while it may look great in theory to have a high risk/reward ratio, the factor of position size deserves more attention. At low leverages and/or fixed position sizes, the risk/reward ratio is king, but winning percentage is central to the concept of percentage at risk.

For simplicity, let’s take a 25% win rate and combine it with a 4:1 risk reward. On a winning pip basis, this may look good, but to maintain long run profitability the percentage at risk has to be kept low. If we jack up the leverage to 10% per trade and we simplify the results by taking the 3 losses and then 1 win, a return of 6% would be produced after 12 trades.

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1000<o></o>

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900<o></o>

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810<o></o>

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729<o></o>

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1020.6<o></o>

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919<o></o>

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827<o></o>

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744<o></o>

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1041.62<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>40% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 9"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A9*0.1)*-1)+A9" x:num="937.46192399999995">

937<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 10"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A10*0.1)*-1)+A10" x:num="843.71573159999991">

844<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 11"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A11*0.1)*-1)+A11" x:num="759.34415843999989">

759<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 12; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A12*0.4)+A12" x:num="1063.0818218159998">

1063.08<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>40% win<o></o>

</TD></TR></TBODY></TABLE>

Now let’s run a 1:1 risk reward with a 75% win rate, again taking losses first:

<TABLE class=MsoNormalTable style="MARGIN: auto auto auto 4.65pt; WIDTH: 126.75pt; BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt" cellSpacing=0 cellPadding=0 width=169 border=0><TBODY><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 0; mso-yfti-firstrow: yes"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70>

1000<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>Start<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 1"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A1*0.1)*-1)+A1" x:num>

900<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 2"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A2*0.1)+A2" x:num>

990<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 3"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A3*0.1)+A3" x:num>

1089<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 4"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A4*0.1)+A4" x:num>

1197.9<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 5"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A5*0.1)*-1)+A5" x:num="1078.11">

1078<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 6"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A6*0.1)+A6" x:num="1185.921">

1185.921<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 7"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A7*0.1)+A7" x:num="1304.5131000000001">

1304.513<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 8"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A8*0.1)+A8" x:num="1434.96441">

1434.964<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 9"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=((A9*0.1)*-1)+A9" x:num="1291.467969">

1291<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 10"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A10*0.1)+A10" x:num="1420.6147659000001">

1420.615<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 11"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A11*0.1)+A11" x:num="1562.67624249">

1562.676<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 12; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 52.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=70 x:fmla="=(A12*0.1)+A12" x:num="1718.943866739">

1718.944<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 74.2pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=99>10% win<o></o>

</TD></TR></TBODY></TABLE>
Returns are 72%, or 1200% larger then with a high risk reward solution.

Unfortunately, this isn’t the only reason a high win rate is superior to risk reward. Now I’m no statistician, but the probability of hitting a 50% drawdown (8 consecutive trades) is SIGNIFICANTLY higher on a 25% system then it is on a 75% system, so the trader is all but forced to lower his risk-per-trade rate. If we recalculate the 25% system with a 2% risk-per-trade we get the following:
<o></o>

<TABLE class=MsoNormalTable style="MARGIN: auto auto auto 4.65pt; WIDTH: 96pt; BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt" cellSpacing=0 cellPadding=0 width=128 border=0><TBODY><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 0; mso-yfti-firstrow: yes"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>

1000<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>Start<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 1"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A1*0.02)*-1)+A1" x:num>

980<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 2"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A2*0.02)*-1)+A2" x:num="960.4">

960<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 3"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A3*0.02)*-1)+A3" x:num="941.19200000000001">

941<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 4"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=(A4*0.08)+A4" x:num="1016.48736">

1016.48<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>8% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 5"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A5*0.02)*-1)+A5" x:num="996.15761279999992">

996<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 6"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A6*0.02)*-1)+A6" x:num="976.23446054399994">

976<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 7"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A7*0.02)*-1)+A7" x:num="956.70977133311999">

957<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 8"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=(A8*0.08)+A8" x:num="1033.2465530397697">

1033.24<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>8% win<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 9"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A9*0.02)*-1)+A9" x:num="1012.5816219789742">

1013<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 10"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A10*0.02)*-1)+A10" x:num="992.32998953939477">

992<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 11"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=((A11*0.02)*-1)+A11" x:num="972.4833897486069">

972<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>2% loss<o></o>

</TD></TR><TR style="HEIGHT: 12.75pt; mso-yfti-irow: 12; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64 x:fmla="=(A12*0.08)+A12" x:num="1050.2820609284954">

1050.28<o></o>

</TD><TD style="BORDER-RIGHT: #e0dfe3; PADDING-RIGHT: 5.4pt; BORDER-TOP: #e0dfe3; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: #e0dfe3; WIDTH: 48pt; PADDING-TOP: 0in; BORDER-BOTTOM: #e0dfe3; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" vAlign=bottom noWrap width=64>8% win<o></o>

</TD></TR></TBODY></TABLE>

Now were down to a 5% return over 12 trades. The high win rate system provides a 1440% higher return for an equivalent risk.

Of course this is all simplified and the results would be skewed a bit if we took the wins first, but the conclusion is nevertheless evident.


EDIT: EEK! My spreadsheet cells won't display properly on the forum. Sorry about the weird looking data...