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65% win rate

  • #1
  • First Post: Dec 10, 2019 2:10pm Dec 10, 2019 2:10pm
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input
Thanks
  • #2
  • Dec 10, 2019 2:33pm Dec 10, 2019 2:33pm
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
Inserted Video
  • #3
  • Dec 10, 2019 4:06pm Dec 10, 2019 4:06pm
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
I have seen many TEs that have 65% plus win percentage that are still losing money. It is as much about managing yourself as it is about managing your account/strategy.

If this is a purely mechanical strategy have someone write an EA and forward test it on a demo account only. After 6 months of profitability then go ahead and put it on a small account(100 dollars or less).

If this is a discretionary strategy treat your trading as a business would. Always go for the most profit potential. Always cut out the least profitable parts of your trading. Always safeguard your investment.

IMO you haven't given enough information for any of us to give a really accurate assessment of what you are saying.
  • #4
  • Dec 10, 2019 4:30pm Dec 10, 2019 4:30pm
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
If you have a strategy that is 65% profitable with 1:1 R:R and are making 15%/month, you should just keep doing whatever you're doing and focus on increasing size.

Decreased risk (which is the same as increased reward) will always result in reduced probability. You always have to pay for probability through increased risk (i.e. lower R:R ratio).
Small disciplines repeated with consistency lead to great achievements.
  • #5
  • Dec 10, 2019 8:23pm Dec 10, 2019 8:23pm
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
Dear M.jaafar,
Can you describe more regarding what the average period you used please? I made a few models and could see that the 1:2 RR should in theory have a higher return. This return should be double the 1:1, if you do a simple expectancy on your averages you get 0.3R for the 1:1 and 0.65R on the 2:1. Best to investigate which averaging period you used to make sure it is not too small and that your strategy is consistent to those averages.

Best Regards,
K
"Work hard, put in the effort, and follow your dreams..." -Me
  • #6
  • Dec 10, 2019 8:31pm Dec 10, 2019 8:31pm
not interested
people leave, but this thread will go on for ever
  • #7
  • Dec 10, 2019 8:43pm Dec 10, 2019 8:43pm
Quoting tzamo
{quote} Dear M.jaafar, Can you describe more regarding what the average period you used please? I made a few models and could see that the 1:2 RR should in theory have a higher return. This return should be double the 1:1, if you do a simple expectancy on your averages you get 0.3R for the 1:1 and 0.65R on the 2:1. Best to investigate which averaging period you used to make sure it is not too small and that your strategy is consistent to those averages. Best Regards, K

The period is 12 weeks
  • #8
  • Dec 10, 2019 10:13pm Dec 10, 2019 10:13pm
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
never cross a river if it is 4 feet deep an average..
  • #9
  • Dec 11, 2019 1:27am Dec 11, 2019 1:27am
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
I would favor the better risk to reward ratio and in your case is obvious that 1:1 is better, so you may fail with 1:2, but I wouldn't bet too much in either case.

Better see the reasons behind the success of your strategy and try to find what will make it bust in the end, so you can stop risking your money and protect your self, if anything happen.

Look at fundamentals like, economy.
Looking for profitable short term trades ...|
  • #10
  • Dec 11, 2019 1:56am Dec 11, 2019 1:56am
Quoting M.jaafar
I have strategy that work more than 65% on average if i use 1:1 risk to reward ratio and make on average 15% return a month, when i tested the 1:2 risk to reward ratio success rate dropped to 55% wining rate and 11% return on average,i know numbers are obviously suggest to go with the 1:1 r r but I’m curious fir the experienced traders input Thanks
Forget about R:R. It's irrelevant. What counts is the winning percentage!

Win % = % won - % lost


And don't forget to account for spread, slippage, etc. And, of course, 12 weeks are not enough by far to rely on the strategy.
  • #11
  • Dec 11, 2019 8:09am Dec 11, 2019 8:09am
Quoting AntiCre
{quote} Forget about R:R. It's irrelevant. What counts is the winning percentage! Win % = % won - % lost And don't forget to account for spread, slippage, etc. And, of course, 12 weeks are not enough by far to rely on the strategy.
I don't believe this is accurate. There are three components to understand: potential win, potential loss, and probability of either occurring. I can provide you with a 99% win rate strategy that will result in a net loss overall.

I would agree that positive R:R is not a necessity. However, it is harder to maintain a win rate >70% than it is to achieve positive R:R, in my opinion.
Small disciplines repeated with consistency lead to great achievements.
  • #12
  • Dec 11, 2019 8:18am Dec 11, 2019 8:18am
Quoting jmflukeiii
{quote} I don't believe this is accurate. There are three components to understand: potential win, potential loss, and probability of either occurring. I can provide you with a 99% win rate strategy that will result in a net loss overall.
That's true. However, if he claims that he has a 65 % edge, the winning probability is already encountered in the formula, isn't it?
  • #13
  • Dec 11, 2019 9:28am Dec 11, 2019 9:28am
Quoting AntiCre
{quote} That's true. However, if he claims that he has a 65 % edge, the winning probability is already encountered in the formula, isn't it?
Yes, but changing either the risk or the reward would result in lowering the probability (as he demonstrated with a 55% win rate at a greater reward:risk). Either way, I would focus on continuing with the 1:1 with higher win rate and work to increase size. Increasing size rapidly is more difficult with a lower win rate.
Small disciplines repeated with consistency lead to great achievements.
  • #14
  • Dec 11, 2019 10:06am Dec 11, 2019 10:06am
Your calculation are based two scenarios, win or lose ...
What about several options of closing trade before get red and not reaching TP? Will you give up money already laying on the table? YOUR MONEY?
In my opinion, what you need is strategy of taking position and another strategy of closing position... you can have several strategies how to close a trade. Waiting for get SL hit, is not wise for me, as well as closing TP = 1 if we see strong momentum...
RR, win rate put you in the box kind of thinking ... your thinking should go in direction not to loosing , this will create for you positive expectancy of your trading.
My opinion is following ... skill is what you need, when to enter and where to close ...
Whats more ...Having strategy giving in the past 65% win ratio with 1 : 1 does not guarantee that the result will be the same in the future.
Past is only one scenario, and a milions could might happen.
Take look for Monte Carlo simulations ....

Attached Image (click to enlarge)
Click to Enlarge Name: 25 trades.png Size: 186 KB


Having 25 trades still you can have 40% DD

Attached Image (click to enlarge)
Click to Enlarge Name: 100 trades.png Size: 201 KB


Having 100 trades you can earn "0" (costs of trading are not presented)

Have nice fun...
  • #15
  • Dec 11, 2019 11:57am Dec 11, 2019 11:57am
Quoting BlackNapkins
Your calculation are based two scenarios, win or lose ... What about several options of closing trade before get red and not reaching TP? Will you give up money already laying on the table? YOUR MONEY? In my opinion, what you need is strategy of taking position and another strategy of closing position... you can have several strategies how to close a trade. Waiting for get SL hit, is not wise for me, as well as closing TP = 1 if we see strong momentum... RR, win rate put you in the box kind of thinking ... your thinking should go in direction not...

I backtested a lot of exit strategies (20 strategies )non of them provide quality results so I sticked with the fix rr
  • #16
  • Dec 11, 2019 12:07pm Dec 11, 2019 12:07pm
Only with Hedge system you can rate 65%
  • #17
  • Dec 11, 2019 12:09pm Dec 11, 2019 12:09pm
Quoting M.jaafar
{quote} I backtested a lot of exit strategies (20 strategies )non of them provide quality results so I sticked with the fix rr
Fixed risk is crucial and some time more reward is the key...
Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -629
  • #18
  • Dec 11, 2019 12:44pm Dec 11, 2019 12:44pm
Quoting ForexCR
Only with Hedge system you can rate 65%
No it’s not a hedge system it’s based on indicators i programmed
  • #19
  • Dec 11, 2019 1:21pm Dec 11, 2019 1:21pm
Quoting BlackNapkins
never cross a river if it is 4 feet deep an average..
//----

....... replace napkins with swan and we get,,,,,, is that a coincidence...... lol.....

nassim taleb is correct if all we have is average..... fortunately we have more information at our disposal..... both maximum drawdown() and absolute drawdown() that will show us the deepest point before we dive in.....

lest we forget, past results is no indication of future performance.....h
to trade and code, keep both simple... no call to impress....h
  • #20
  • Edited 11:03pm Dec 11, 2019 10:36pm | Edited 11:03pm
Quoting hayseed
{quote} //---- ....... replace napkins with swan and we get,,,,,, is that a coincidence...... lol..... nassim taleb is correct if all we have is average..... fortunately we have more information at our disposal..... both maximum drawdown() and absolute drawdown() that will show us the deepest point before we dive in..... lest we forget, past results is no indication of future performance.....h
It is coincidence ... in my case first was a fan of Frank Zappa, Nassim fan I am only for last few years ...
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