Anyone using Avg W < avg L?

Does anyone know of a professional trader that uses an avg W < avg L?

I was under the assumption this isn't survivable -- long term.

Why would you make that assumption? Take a good trader, halve his (or her) stop, and he'll probably be <50% but still profitable.

Lots of traders have these type of win/loss size stats, all that matters is long term positive expectancy.

avg win versus avg loss is only one side of the story. What's the win rate? Once you have that you can calculate expectancy:

(win rate * avg win) - (loss rate * avg loss)

So if the win rate is 70% (and the loss rate is 30%) and the avg win < avg loss you can have a profitable system:

(0.70 * 0.50) - (0.30* 1.00) = 0.35 - 0.30 = 0.05

As long as expectancy > 0 you're profitable.

Can you please a couple of them?

Thanks

Understood... and agree. But, should we not be prudent any and base a strategy/MM on a 50% or less win percentage?

Depends on your trading style. Some traders are trend traders and some are counter-trend.

Trend following systems tend to have win rates less than 50%. But they make up for it by having average win size greater than average losers. Trend following systems are considered to be the safest and surest way to make money by many.

In the thread here, Building an Equity Millipede the OP describes the method he's been using successfully in which he takes many small losses in order to build long-term positions. These positions have very high reward:risk, 100:1 or 1000:1. It requires lots of patience and dedication but it matches his personality and style.

You should read Van Tharp's "Trade Your Way to Financial Freedom" some time. He shows how inexperienced traders tend to latch onto systems with high win rates thinking they're "safer". In reality, a high win rate is an illusion. As a system designer, your job is to look for the highest reward:risk trades; that's most important. He uses the expectancy framework to explore these aspects.

It's prudent to find your trading style and develop it.

heh, very tough though...

Thanks for the tips. I've had that book on my list; need to bump it up right after I'm done with Al Brooks. And that thread looks good.. reading through it now.