How important is the win rate when trading stocks, futures or any other asset class? If you lose more than 50% of the time, does that necessarily means that the strategy is a losing strategy? https://www.alphaoverbeta.net/blog/
The only thing that is important is are you making money in the long run. Look at it this way, the stock market is up about 53% of all days, but 70% of all years.
More important is risk:reward ratio and that you trade with stops to eliminate possible large losses. The win percentage will take care of itself.
I prefer my 70% win rate, my average profit is only about 1.2x's loss rate, I'd like it higher, but every time I try, while trying for runs with a tight risk control = losses. Better to take +$60 than SL for -$40 cause your +$100 better off. I occasionally get on a good run and ride it, but if you trade every trade like it's going to be a good run, then SL will be hit most of the time.
Automated traders need to chime in here. Some of them do very well with ridiculously low win %. Necessary win % is dependent on the methodology structure.
Great topic, I was covering that in my room today. Win percentage is totally irrelevant, all that matters is net profitability using scaling and tight stops. It's my experience that nobody is consistently making over 50% winning trades, and if anyone claims they make 80% winning trades that's likely bs. My most profitable months are ones with many small trades with position sizing. I tell traders to think of my "30% Rule" which is 'how can you be profitable if you're right only 30% or less of the time in your trades?" The answer is always to scale into winners, start small with tight stops, re-entries. On 10 trades I'm fine taking 7 $50 stops so long as I make more than $350 on the other 3 trades. That's the essence of successful trading -- lots of shots with tiny stops.
It is very important. http://systemtradersuccess.com/important-performance-measure-trading-strategies/
Glad it works for you. I do the opposite on all fronts. I scale in (average down) into losers, take quick profits, and maintain a high win rate. But then I am a scalper. Win rate is very important, especially important, to a scalper of 1 to 8 points in say, the ES.
I really think that it needs to be greater than 50 percent for most traders. I say that because most traders have rather imperfect position management. Another factor is that for most trading systems the winners are not substantially larger than the losers.