70% winning trades system

I have a system that is producing 70% winning trades, but I keep loosing money. Any suggestions. the problem I guess is stop and target levels.

thank you :-)

Looks like R:R is a bit skewed. Fix that and you're the next George Soros.... where do I send the check

Though you have a high hit rate, your average profitable trade is still not high enough.

From your statistics:

average profitable trade = .40 x 70% wins yields ==> .28 profit
average losing trade = 1.01 x 30% losses yields ==> -.30 loss


You expectation is still negative.

Find the "sweet" spot where you hold your winning trades longer,
even if you sacrifice some win% such that your expectation is higher.

-or-

Make your losers even smaller and keep the same win/loss percentages.

Right now the sizes of target and stop are always set equal. Then the trailing stop is activated and the trade turns back and produces small profit. However if the trailing is not activated or not hit, I get either loss or gain in the level of 100 pips.

Should I skip the trailing stop? and keep stop and target at those 100-ish distance levels?

Or should I just forget trailing stop and go for smaller ranges , like 40 pips distance from entry for the stop and target levels....

I'm no expert on exits, and some may argue this...

I believe a trailing stop is best used in "systems" when trying to protect large profits (in a trade).

As you have a high hit rate system, your profits compared to losses, in general, are smaller. I wouldn't use a trailing stop at all.

I don't know the pairs you trade, or your system methods, so I can't really say that you should change your profit or stop-loss levels.

(Another thought, perhaps your trailing stop has "tweeked" your system into a high win% system, and removing it will change your results dramatically. So far you have 100 trades, perhaps you can backtest for more results)

You are right, the trailing stop might have done this, I will check that.

Anyway the system is no secret. I have discussed it here some time ago. I will try to dig the thread.

Not only that, but each trade cannot have an identical stop and target. It all depends on conditions out there and what TF you trade on. Stops should be varied according to levels on your chart that are important at that time such as previous SR's, Fibs, TL's etc.

Your basic strategy is fine, your win ratio shows that, you just need to adjust your stops accordingly, at what point in your trade would you enter the opposite direction or at what point would a range justify not entering a trade at all, to start with those two are good places for stops both as hard stops and as targets. Using a TS prevents a trade from developing and you get stopped out at the first hint of a retrace, especially if your TS is too tight.

So work on your stops without eroding your W/L ratio. Setup a seperate demo and adjust your TP's first without touching your SL, trade the same amount of trades and see how you get on. Then setup a demo and adjust your SL without touching your TL and see how you get on, then find the "sweet stop" using both those accounts, setup another demo and again trade the same amount of trades and don't adjust your findings in the interim, see the results and keep repeating the process until you find a "total" strategy that works for you hoping to keep your 70% W/R. Just make sure that you keep a large enough sampling in each test or else you will never find your strategy. Then keep repeating that throughout the life of your strategy, do monthly and quarterly audits of all your trades to make sure you still follow your strategy and to see if you can finetune it at all, testing on demo again first before adjusting your live strategy. You are never really finished with building your strategy.

The target and stop are not hard set to 100, but usually they end in that range. I trade 15min charts, various pairs. The system is based on 5min follower system , so it uses Laguerre and is amended with MACD crosses. looks like I do not have the system description here on FF, so I have to write it from scratch. I will do that first think soon.

The reason is the RRR like mr.marketz has said.

I can code you a method with a 99% of successful rate, simply with 1 pip of TP and 100 pips of SL. But it will still losing money.

Winning is not about good or bad trades. It's about money management. Sure, we all look to make good trades, and most of us hit well over 70% with them, but when we have a loser in the %30 category we tend to let it run like a chicken with its head cut off! Set stops and set target profit levels and live by them.

Well risk reward ratio is the problem here... with my system I try and have it so my TP is double the SL and aim for anything over 50% wins... then I know im in profit...

Is there a way you could apply this to your system?

If your trailing stop is set to 100 and you end with a small profit, why don't you just close the trade at 100 pips?