How important is the win percentage?

We should all be practicing smart trading while ignoring foolish notions.

 

So, lets assume there is a trader that does in fact have a 95% win rate but he blows his account. Why did he blow it?

 

thats the idea :-(

 

Because if you make 100 trades, and have 95 wins for 1 pip each, for a total of 95 pip gain, all it takes is 5 more trades of -20 pips to turn that into a losing run. (or losing account, depending on how much you are trading, heh)

My journal will be a perfect example of that when I next update it. I have been able to maintain a win rate of something like 70-80%, but not by choice. That is simply how it turns out to be. My problem is that my losers are bigger than winners over long-term, so it winds up being a loser stat.

Win percentage is just an artifact of trading, and not a method of it, in my mind. I just trade and trade and trade, and the win% turns out to be what it is. I do not look for it to be a certain number, I simply observe what it happens to be.

 

The unusually high win rates that blow up are caused by the trader getting win rate tunnel vision. Their ego ends up getting the best of them. The cocky trader bragging or lying about their 90% win rate is never around very long - natural selection at work.

To pull it off they take smaller & smaller profits, let losers run in hopes of a rebound, & add on to the losers - eventually a loser runs so far they blow up.

 

How important is the rate at which you get your paycheck ?

Daily ? Weekly ? Monthly ? Yearly ?

You must be thinking “My salary daily of course”
But your salary daily isn’t the weekly one.

How important are the figures written on it ?

Do you prefer 10 now or 20 later ?
What if later is in 5 days ? 10 days ? 20 days ?

How important are your responsibilities ?
What if you could do less and be paid more ?

What difference would have the greater impact ?

Time ? Quantity ? Efforts ?

Problem is most of the time,
You can only move 1 variable and the 2 other follow.
...

Frequency is important.
Of course but not taken out of context.
To win for winning is utterly BS.

Would you accept to bet 2$ to get 1$ for calling the outcome of a fair coin flip ? Why ?

99% winners isn’t enough,
If your maximum loss is infinite.

It’s a dummy variable.

 

So, in theory what is the solution?

 

The solution is 1:1 RR ratio, and be sure of your entries. That's it.

 

How would you propose to solve this problem of losers being bigger than winners?

 

Best I can tell in this crazy market action is to have a 1:1 profit target vs stop, and be sure of the entries. If you can get the direction correct more than 50% of the time, you are golden. Basic math, yes, but that is all it takes.