How important is the win percentage?

Discussion in 'Trading' started by Trade Prophet, May 8, 2020.

  1. comagnum

    comagnum

    I would say don't make your win rate your highest priority. It's how much you lose when your wrong & how much you make when you right that will determine your outcome.
     
    #81     May 9, 2020
    Sekiyo likes this.
  2. volpri

    volpri

    Win rate. Reward to Risk. Average win vs average loss...etc All concepts to consider.

    But consider this: Take the concept of Reward to Risk. By itself it is meaningless. Unless probability is thrown into the mixture; Reward to Risk really has no useful function.

    To say, I only take 3:1 (reward to risk) trades or 5:1 in theory sound good, and is mathematically sound, “in theory”. But unless the probability of the trade actually panning out and being a successful trade (i.e. a trade that completed within the specified R:R) becomes a part of the overall equation the exercise of R:R makes very little trading sense.
     
    #82     May 9, 2020
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  3. I don't look at the win ratio when analyzing a trading strategy, not right away, it's in the short performance report generated by the system and I look at it but I have to say that it's Sharpe ratio i look 1st then it's CAGR, after I review these scan the entire preformed report, but these two are the top of my list when looking at my strategy performance report
     
    #83     May 9, 2020
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  4. Sekiyo

    Sekiyo

    By default a 1:1 trade is a coin toss.
    You need a bias to get unfair probabilities.

    By default a 2:1 trade is 2/3 win.
    You need to “Be sure of your entries”.

    By default a 1:2 trade is 1/3 win.
    You need to make a difference.
     
    #84     May 9, 2020
    KCalhoun and Trade Prophet like this.
  5. Ohh and drawdown of course
     
    #85     May 9, 2020
  6. KCalhoun

    KCalhoun

    Trade frequency and pattern strength are also important.... I used to overtrade out of fomo and get death of a thousand cuts & commish kill (I spent 30k on commishes doing 9k trades in 2018/19 for example). My situation is a bit unique though because I am doing lots of pattern testing to design strategies for my traders.

    Lesson learned is be more patient for top setups where you've got a clear edge, eg when I bought MGM near $7 on pivot long, was easy.

    Truth be told I still overtrade and am extremely action focused, I love to trade. Thankfully doing so commish free with small size and tight stops keeps costs much lower. I'm trying to ask myself "do I have a clear edge in this chart?" from now on, like my winning TNA breakout trades yesterday.
     
    Last edited: May 9, 2020
    #86     May 9, 2020
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  7. Trade Prophet,

    Just focusing on making money and doing the right thing daily.

    Most people want high win rate
    Most people want good R:R
    Most people want less R:R
    Most people want low win rate.

    What do you want?

    I personally want decent high win rate and a good R:R equal to 1 or 2.

    I want even put the trade on if I do not think the trade can go for R:R = 1 or higher. Cause think about it, if I take 250 trades, I only need to be right 50% time to break even. So that is what I am doing and that is my plan, win more than 60% of the time.

    I personally do not want to be losing all the time. So for me, high win rate.

    Also, I personally do not want to be in drawdown for long time.

    BUTTT, I am a newbie consistent profitable trader, so winning alot more helps for me confidence building.
     
    Last edited: May 9, 2020
    #87     May 9, 2020
    Trade Prophet likes this.
  8. So what's the top 3 performance metrics you look at when evaluating a new strategy?
     
    #88     May 9, 2020
  9. Do you track your performance?
     
    #89     May 9, 2020
    SimpleMeLike likes this.
  10. Trade Prophet,

    YESSSSS, yesss, of course I do. YESSSSS.

    If you are not tracking your trades and the stats, you are bullshitting and wasting time for real for real.

    I can not build confidence and trust what I am doing without measuring the performance of what I am doing.

    You have to find 1 trading style and get profitable with you are comfortable
     
    Last edited: May 9, 2020
    #90     May 9, 2020
    Trade Prophet likes this.