100% Return, 97% Wins- What if the Holy Grail exists? | Forex Factory

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100% Return, 97% Wins- What if the Holy Grail exists?

  • #1
  • First Post: Jan 6, 2020 10:33am Jan 6, 2020 10:33am
Hi everyone!

I would like to use this topic to discuss the very existence (or non-existence) of the Holy Grail and what it means to you. What is the Holy Grail for you? Or is there one out there? There is no lack of discussions about this, I would like to share my experience and how it changed my belief.

In one of the Market Wizards books, a trader was said to win over 95% of his trades. I was wondering how that could be possible without affecting your risk parameters. I went on to do my research and testing.

First, a bit about myself. I’ve been trading for 5 years. Like all beginners, I had my fair share of losses and frustrations. Things started to turn around after I put more time into testing and managing risks. I was able to finish the last two years in green. From 10% to 30%, nothing spectacular but hell I was happy about that achievement.

Last summer I started to test a trend-following variation of my strategy, in conjunction with existing variations. Results are below. In 110 trades, only 3 losses (each less than 1% of equity).
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  1. 6 month return: 100%
  2. Wins: 97%
  3. Drawdown: 27%

What happened to the DD? A few things need to be taken into consideration. Since this demo account was for testing, mistakes were encouraged to be made, journaled and corrected. A few trades were taken but were not part of the strategy, leading to unwanted drawdowns or profits. While a few +3% opportunities were missed due to late sessions or early exits.

Most errors happened in the beginning of the testing period as you can see from the equity drawdowns (4-5%) in July and August, this was due to my unfamiliarity with the strategy. The largest drawdown (+20%) was a GBPJPY trade which wasn’t meant to be taken (cancelled in live account but forgotten on this test account, face palm haha). So once cleared of mistakes and execution errors, the actual strategy is pretty solid.

  1. 6 month return: ~100%
  2. Wins: +97%
  3. Drawdown: <10%

Maybe this is too good to be true and has yet to stand the test of time. Or maybe the Holy Grail exists after all, you just need to understand the game. How do you define it? I guess we agree it must be sustainable year after year. Is it a system that gives positive return say +10% every single year? Or one with minimum losses. If you can define your Holy Grail, you will have the parameters you can work on.

  • #2
  • Jan 6, 2020 11:10am Jan 6, 2020 11:10am
Quoting Faybonachi
Hi everyone! I would like to use this topic to discuss the very existence (or non-existence) of the Holy Grail and what it means to you. What is the Holy Grail for you? Or is there one out there? There is no lack of discussions about this, I would like to share my experience and how it changed my belief. In one of the Market Wizards books, a trader was said to win over 95% of his trades. I was wondering how that could be possible without affecting your risk parameters. I went on to do my research and testing. First, a bit about myself. I’ve been...

IMO, it is all about the ratio of the following 2 numbers. How you achieve this ratio does not matter.
1) Equity % per annum
2) Max Drawdown in % of Equity.

I believe ratio of 6:1 (or greater) for the above is a Holy Grail.

Agree?
  • #3
  • Jan 6, 2020 11:18am Jan 6, 2020 11:18am
Honest question (without "feelings" in the middle) lol:

Those results Impress you?? because trading its simple and fairly easy.. NOW can you repeat those same EXACT steps everytime withouth giving a dam about the results?? not overthinking and overcomplicate everything just for ther sake of it?? thats the REAL key in this game =)

And actually 100% return of the capital in 110 trades.. unless the market wasnt moving or you were trading some weird instrument.. its not exactly super impressive; AGAIN no offense, but those numbers can get WAY higher with some tricks of money management =)
  • #4
  • Jan 6, 2020 11:35am Jan 6, 2020 11:35am
Good luck.
  • #5
  • Jan 7, 2020 1:00am Jan 7, 2020 1:00am
Quoting yalgaar
{quote} IMO, it is all about the ratio of the following 2 numbers. How you achieve this ratio does not matter. 1) Equity % per annum 2) Max Drawdown in % of Equity. I believe ratio of 6:1 (or greater) for the above is a Holy Grail. Agree?
Something like that, I believe it's about lowering your risk first and only then you can make money consistently. A 5%DD with 30% return year after year has much better chance to survive the game than 30%DD with 80% return
  • #6
  • Jan 7, 2020 1:13am Jan 7, 2020 1:13am
Quoting havo
Honest question (without "feelings" in the middle) lol: Those results Impress you?? because trading its simple and fairly easy.. NOW can you repeat those same EXACT steps everytime withouth giving a dam about the results?? not overthinking and overcomplicate everything just for ther sake of it?? thats the REAL key in this game =) And actually 100% return of the capital in 110 trades.. unless the market wasnt moving or you were trading some weird instrument.. its not exactly super impressive; AGAIN no offense, but those numbers can get WAY higher...
I'm fairly impressed with this result. Not so much by the 100% milestone but by the smoothness of the equity/balance curve. Trust me I've seen loads of P&L, traders with way higher returns than this. The question is are they still in the game after a year? is their DD under 15%? This is a game of risk-adjusted return, unless you just want to play for a few months, pure return means nothing.

110 trades are not much, that's 1 trade a day. Why having your eyes glued to the screens and stress out when you can just put 1 trade a day and double your account every half year? It can surely get better, that's the purpose of testing I'm open to your suggestiong on
Quote
tricks of money management
  • #7
  • Jan 7, 2020 2:54am Jan 7, 2020 2:54am
I agree that this is very impressive result if this is coming from true account & strategy.
As I was in same boat - that spent few yrs of loss and began to turn around recently - I am open to your suggestion.

I believe riding on the trending wave is the way to go.

Waiting …
  • #8
  • Jan 7, 2020 6:06am Jan 7, 2020 6:06am
Quoting Faybonachi
{quote} pure return means nothing. 110 trades are not much, that's 1 trade a day. Why having your eyes glued to the screens and stress out when you can just put 1 trade a day and double your account every half year? It can surely get better, that's the purpose of testing I'm open to your suggestiong on {quote}
Return its EVERYTHING !!! why are you trading in the first place?? how can someone says that "pure returns means nothing" ?? you dont want to end in profit??

And 100% RETURN in 110 trades with that hit rate.. you need to focus on the important, before moving on, you are missing the point by a long shot !!

Thats the biggest enemy of a "trader" nothing else
  • #9
  • Jan 7, 2020 11:24am Jan 7, 2020 11:24am
Quoting BlueRain
I agree that this is very impressive result if this is coming from true account & strategy. As I was in same boat - that spent few yrs of loss and began to turn around recently - I am open to your suggestion. I believe riding on the trending wave is the way to go. Waiting …
Glad to hear you've crossed to the winning side. This test will go on, it's all about finding out if this can be sustainable.
  • #10
  • Jan 7, 2020 11:28am Jan 7, 2020 11:28am
Quoting havo
{quote} Return its EVERYTHING !!! why are you trading in the first place?? ...
Well, for me, managing risk is EVERYTHING !!! I'm curious about what your target DD is. As the saying goes, in the market everyone's looking at others' wallets, you'd better look after yours first.

You seem to miss the importance of 100 trades and 6 months. Trading is nothing but a game of probability. And in probability, sample size and observation length are most important. 100% return in 100 trades is far better than 100% in 20 trades, 100% return in 6 months is far better than 100% in 6 days. Why? Because larger sample and longer period mean the strategy is more stable and sustainable. Give each person 10 accounts, most can have at least 1 account that doubles within a month! But the truth is how many can keep it going after 3, 6 months or a year? You know the answer as much as I do.
  • #11
  • Jan 7, 2020 12:38pm Jan 7, 2020 12:38pm
Quoting Faybonachi
{quote} Something like that, I believe it's about lowering your risk first and only then you can make money consistently. A 5%DD with 30% return year after year has much better chance to survive the game than 30%DD with 80% return
Hi Faybonachi,
I agree with the sentiment here, managing risk is everything and a low drawdown method is very valuable. Consistent profitability over time is largely a matter of good risk control and consistent, disciplined execution over and over.

The results as presented in your demo are impressive. If you can get near replicating that over 6 months with a real money live account of meaningful size that would genuinely suggest you could make a good living from your trading. Good luck!
  • #12
  • Jan 7, 2020 6:44pm Jan 7, 2020 6:44pm
Quoting Faybonachi
{quote} Well, for me, managing risk is EVERYTHING !!!
you dont want to lose.. and you dont know when are you going to lose exactly because you are not reading the price and the market, your strategy its based on indicators and random sized candles, therefore the only thing you focus its in "managing risk"

OR... you have a risk adversion personality and want "security" above else ??

Risk its managed already ONCE you do the right things from the start (before placing the trade).. whatever % size you use in a trade its not connected to those conditions, therefore "managing risk" via tiny/small lot trades its like using a extinguisher to kill a fire that YOU start with a lighter every time!! how about DONT start the fire in the first place?? =)


Quoting Faybonachi
{quote}I'm curious about what your target DD is. As the saying goes, in the market everyone's looking at others' wallets, you'd better look after yours first.
I dont care Drawdown.. 1 trade gets me back AND over my previous capital easily, i always make more than i lose AND i always make it to a level where i can WITHDRAW the profits.. every month

Quoting Faybonachi
{quote}You seem to miss the importance of 100 trades and 6 months. Trading is nothing but a game of probability. And in probability, sample size and observation length are most important. 100% return in 100 trades is far better than 100% in 20 trades, 100% return in 6 months is far better than 100% in 6 days.
Are you kidding me?!?! so its better to take 100 trades in order to double the account INSTEAD of just 20??

what if.. you can take those 20 trades PER MONTH (and double the account in the process) over THE SAME PERIOD of 6 month where it took you 100 trades to double it?? think it about it..

Quoting Faybonachi
{quote}Why? Because larger sample and longer period mean the strategy is more stable and sustainable. Give each person 10 accounts, most can have at least 1 account that doubles within a month! But the truth is how many can keep it going after 3, 6 months or a year? You know the answer as much as I do.

The ones that knows how to trade and have a reason for doing it (no fear, its all math)

The ones that knows how to READ the price in itself WITHOUT indicators... (more accuracy and consistency this way EVRY SINGLE TIME, no "strategy" needed)

The ones that actually WAIT FOR a trade WHEN the right conditions are met (almost sure winners)

The ones that knows that a good oportunity have to be exploited via GOOD (and not the crap 2% max myth) money management, equity/position exploit, multiple position sizing, etc..


THOSE ARE THE ONES THAT LAST LONGER THAN >3/6 MONTHS even YEARS doing this activity


In the end, trading its all a of bit patience (waiting), a bit of logic (price reading), some math skills (trade/position exploting) and some practice (until you get it).. Rinse and repeat in a loop forever


EVERYTHING ELSE its stupid things we invent to make this harder than it actually is..



The ones that knows
  • #13
  • Edited 7:53pm Jan 7, 2020 7:43pm | Edited 7:53pm
managing risk is EVERYTHING
Return is EVERYTHING !!!

You are talking two side of same coin.

I don't care which side is better or worse.
I want No risk with High return if there is such thing.

Just show me how you are making your money..

Once ProfitFarmer said
Quoting profitfarmer
{quote} There is no secret other then everyone has a personality. If you make money, chalk the stress up as part of the job. If you can't stand the short timeframe don't trade it, find another way, something you ultimately comfortable with, yet still make money. Not much a sense to feel more comfortable but lose. Now, that would be stressful!! As I see it: whatever way others trade or not trade has no direct or indirect effect to your trading. This is an internal issue entirely, and only you alone can define what suits you. That said I am sure in a short while you will get answers ranging from yoga to Zen meditation to tree hugging as a surefire way to emotional well being...and most likely being FF a forum as is, just about zero fact to back it up that any of the aformentioned remedies lead to a better balanced and importantly profitable trading. Happy weekend!
  • #14
  • Jan 9, 2020 8:04am Jan 9, 2020 8:04am
Quoting havo
{quote} EVERYTHING ELSE its stupid things we invent to make this harder than it actually is.. The ones that knows
Lol the difference between us is that I'm merely showing an experiment, and you're regurgitating the grand trading 101 copy-pasted from Babypips or who knows where. Are you one of those coaches who preach "i can WITHDRAW the profits.. every month", "WAIT FOR a trade WHEN the right conditions are met", "trading its all a of bit patience (waiting), a bit of logic (price reading), some math skills (trade/position exploting) and some practice (until you get it)". Lol we're not here to give each other lectures.

If you don't care about DD, mind if you show us your equity curve, maybe you just like big swings.
  • #15
  • Jan 9, 2020 8:09am Jan 9, 2020 8:09am
Quoting BlueRain
managing risk is EVERYTHING Return is EVERYTHING !!! You are talking two side of same coin.
Not exactly, one is smoothing the equity curve and aiming for consistency; the other is looking for pure alpha and accepting bigger swings like the gentleman above. You cannot have both that's why all sound investments are measured by risk-adjusted returns. Pure alpha can only fool retail beginners.
  • #16
  • Jul 8, 2021 1:32pm Jul 8, 2021 1:32pm
Quoting Faybonachi
Hi everyone! I would like to use this topic to discuss the very existence (or non-existence) of the Holy Grail and what it means to you. What is the Holy Grail for you? Or is there one out there? There is no lack of discussions about this, I would like to share my experience and how it changed my belief. In one of the Market Wizards books, a trader was said to win over 95% of his trades. I was wondering how that could be possible without affecting your risk parameters. I went on to do my research and testing. First, a bit about myself. I’ve been...
A ninety-seven percent win rate is more than impressive!! Where did you learn to trade this way? I guess your whole strategy based on the trend-following indicators, isn't that so?
  • #17
  • Jul 12, 2021 5:33am Jul 12, 2021 5:33am
Yehy I got 96% without stop losses. grewat.
LOVE
  • #18
  • Jul 15, 2021 5:05pm Jul 15, 2021 5:05pm
It is a great oytcome to win the trades and 97% is great for me. But I want to know about your satrategy how do you manage your trades to get good results like above?
  • #19
  • Last Post: Jul 18, 2021 6:45pm Jul 18, 2021 6:45pm
I was under the impression that the best traders only 'win' 40% of the time.

Are you more concerned about 'being right' and 'winning'?

Wouldn't you be happy to 'win' 'only' 40% of the time if it meant making greater profit?
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