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High win % but bad R:R

  • Post #1
  • Quote
  • First Post: Edited at 3:49pm Jun 3, 2015 3:38pm | Edited at 3:49pm
Hello,

first real post here (but longtime lurker)...
i 've forward tested (7 months now, real account, 1:100 leverage, 1K Deposit, 65 trades, compounding strategy, +700%, aggressive risk 10% ) a system with a very high win rate (about 96%), but with a very bad r:r (about 3:1, sometimes like today 4:1).
How would you trade this in terms of money management?
I'm quite unsure what to do with this...investing more, forgetting, lowering leverage, hedging...

thx
pokrat
Honestly: I wouldn't trade that at all. I do not give too much about win/loss ratio if other circumstances are right but 3:1 or 4:1 is, sorry, insane. Let me guess? Wide SL compared with bad entries? Is there nothing you can optimize? Any chances of adding to winning positions? Also with 4:1 it most probably wont work out anyway.
the problem is: i can tell (more or less) exactly in the morning what level price will reach within a day and which direction - but i`m not able to tell you what price will do within the time to reach this level...
According to your stats (4:1) odds at worst, you need to win 75% of the time with those odds, but you're winning 96% of the time which is a great edge. From what you've said it sounds viable and is obviously working for you, but not a style i'd personally trade.
this odd cannot guarantee consistency. the account must hit rock some day. if you share the system people may understand you better and help out. good luck to you
Quoting ReyesWhite
According to your stats (4:1) odds at worst, you need to win 75% of the time with those odds, but you're winning 96% of the time which is a great edge. From what you've said it sounds viable and is obviously working for you, but not a style i'd personally trade.
reminds me of my times as a professional poker player...in the long term it's not odds that makes you a winning player ,-) (that's what every poker school wants to tell you)
Quoting pokrat
Hello, first real post here (but longtime lurker)... i 've forward tested (7 months now, real account, 1:100 leverage, 1K Deposit, 65 trades, compounding strategy, +700%, aggressive risk 10% ) a system with a very high win rate (about 96%), but with a very bad r:r (about 3:1, sometimes like today 4:1). How would you trade this in terms of money management? I'm quite unsure what to do with this...investing more, forgetting, lowering leverage, hedging... thx pokrat
It's only a bad idea if your entire capital is loaded into trades at any one time. As long as you keep your trade sizes small (and only raise them incrementally as your equity goes up), as long as you keep a sizable part of your capital aside (at all times) as bullets to fight another day with, and as long as you diversify your target currency pairs, you should do alright.

Also, don't forget to NOT enter positions prior to scheduled and related Red events.

Bad R:R is nothing to worry about as long as observable price action data continues to validate your edge.

Good luck!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • Post #8
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  • Last Post: Jun 4, 2015 5:28am Jun 4, 2015 5:28am
Sorry, I have missed that 96% thing. That changes it all a little bit. IF it makes serious profit for you, why not simply make regular withdrawals? There'll be no significant account growth but maybe you do not need that - it's more or less what I do.
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