What's considered a good success rate?

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Old Jul 21, 2009, 7:15pm   #1
 
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What's considered a good success rate?

I only trade EUR/USD and currently average 150 pips a month, but recently I had someone laying in to me claiming his Granny could do better

I've made a total of 32 trades over the last 2 years - I'm much more of a long term swing trader and like to ride trends.

I've had 13 winners and 19 losers.

My average winner is 480 pips versus my average loser which is 145 pips, which I think gives me a risk/reward ratio of 2.25

I'm trading my own system which is designed around my own set of indicators. The only downside is that I trade with quite large stops which limits me to how much I can place on each trade as I only ever take a maximum 5% risk.

I'd be interested to hear how my performance compares to anyone else out there?

Thank you in advance.
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Old Jul 21, 2009, 7:23pm   #2
 
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I don't think success rates tell the whole story. You could have a 99% success rate and show an overall loss.

If you can keep up your results over a large sample i'd say that you're doing very well.
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Old Jul 21, 2009, 7:27pm   #3
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Success rate tells nothing at all as masquerade pointed out. You also need to look at avg. win/avg. loss and profit factor. This paper explains it all in detail:

http://www.tradingpatterns.com/profitability.pdf
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Old Jul 21, 2009, 7:29pm   #4
 
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Originally Posted by Masquerade View Post
I don't think success rates tell the whole story. You could have a 99% success rate and show an overall loss.

If you can keep up your results over a large sample i'd say that you're doing very well.
I completely agree with your point about success rates not telling the whole story.

I think a lot of it comes down to money management and taking the emotion out of it - that's why I designed my own system because before I was just trading on pure emotion and lost myself a small fortune.

Since being disciplined and strictly following my system for the last 2 years, I've managed to maintain my current results.

The fact I've had quite a few more losers than winners doesn't worry me at this stage because as you can see my average winner is far greater than my average loser - I think a good system with proper money management is definitely one of the recipe's for success.

Thanks for your comment
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Old Jul 21, 2009, 8:45pm   #5
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Have you calculated your overall expectancy? That is another reasonable rough and ready measure of your success.
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Old Jul 22, 2009, 2:12pm   #6
 
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Originally Posted by GammaJammer View Post
Have you calculated your overall expectancy? That is another reasonable rough and ready measure of your success.
Are you referring to my risk/reward?

Currently it stands at 2.25 - ie for every trade I place I stand to make over twice the amount I stand to lose.
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