{quote} You can have a win rate of over 90%. If the R : R is skewed to win rate, for example, a 5 pip take profit with a 100+ pip stop loss. I see people occasionally producing these win rates and posting them, but when they fail, they take the account with them, a bit like Martingale. Learners have to be very careful in these threads.
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Please forgive my skepticism here Smikester but the type of performance profile you are referring to just doesn't stack up , either intuitively or mathematically. My skepticism is not of you it is of what you have seen posted
{quote} Please forgive my skepticism here Smikester but the type of performance profile you are referring to just doesn't stack up , either intuitively or mathematically. My skepticism is not of you it is of what you have seen posted
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Well, I'm not surprised. But would it surprise you to know that certain people will devise a system that has the possibility of 90% or better returns, at least over a given period of time, say, 2 months? Then they post on these threads for whatever nefarious reasons they have. I know what they are doing and I have seen it done, but do the newbies?
I fall into this group. I think the main key is money management and patience. Never ever over leverage yourself and cut losses that are not recoverable and you can be ok. So far so good hopefully I can keep it up.
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what happened to this policy? you seem to have a trading strategy that holds until you make a few pips profit even though the trade has been in negative up to several hundred pips. i am surprised this strategy has grown the account this much but not really surprised you are sitting with 50 grand in the red. whats your plan next?
{quote} what happened to this policy? you seem to have a trading strategy that holds until you make a few pips profit even though the trade has been in negative up to several hundred pips. i am surprised this strategy has grown the account this much but not really surprised you are sitting with 50 grand in the red. whats your plan next?
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I changed it up a bit. The plan is not complex or anything it’s just to do a monthly goal of about 5% while closing about 3 or so of my biggest losers. When I started this strategy I was pretty much prepared to be locked in for a few years so being in the red doesn’t bother me much since I never been close to a margin call in a year ½ since I started. Time will tell though.
I have never seen any trader with this success ratio (for a long time). Yes, it’s possible for a couple of monthly maybe, for the years & years it’s really difficult to gather.
I have never seen such a trading system, to be honest, and I doubt I'll see one in the foreseeable future.
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If you make one trade and that single trade is profitable you have a 100% success ratio.
You can also be profitable with a system that has <50% successful trades. And vice versa, it doesn't mean much.
I would like to give a pretty simple example with a question first as follows:
Who is more profitable after 100 trades? Trader A with 95% winrate or Trader B with 20% winrate?
If you have an answer to this, than you are wrong regardless of what you answer since the isolated winrate does not matter.
What we need to know is the average risk:reward both traders are getting.
If trader A has an average RR of 0.1 to 1 with a 95% winrate, that would mean that he risks i.e. 100 USD to get 10 USD. That would mean one loss wipes out 10 winning trades, but hey, he has a 95% winrate! However, the risk:reward sucks.
Trader B has a winrate of 20% but his average RR is at 1:30! The winrate "sucks", but the RR is fantastic!
As you can see, the winrate needs more factors to consider (also something like drawdown and such) so if you are chasing a strategy with just the isolated winrate, you might not be profitable after all depending on other factors!
EDIT: You can get that high of a winrate if you scalp say 3 pips and your SL is 50 ... how often will you hit that 3 pips TP? VERY often and there you have a 95% winrate!
{quote} If you make one trade and that single trade is profitable you have a 100% success ratio. You can also be profitable with a system that has <50% successful trades. And vice versa, it doesn't mean much.
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One trade is not a trading system though.
I do agree with your second point.
