Why only 66% approximately?

This is a discussion on Why only 66% approximately? within the General Trading Chat forums, part of the Reception category; I keep hearing about traders acheieving only around 60-70% success rate with their trading. Why is this the case ? ...

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Old Jun 5, 2011, 10:48pm   #1
Joined Apr 2011
Why only 66% approximately?

I keep hearing about traders acheieving only around 60-70% success rate with their trading. Why is this the case ? What are the factors that one should be looking out for to increase these odds?

Can they be improved upon?

It would be great to hear from traders who have overcome these kind of problems.
Billy Gates is offline   Reply With Quote
Old Jun 5, 2011, 10:59pm   #2
Joined Jul 2008
It's different for everyone. I would expect there was a band where the majority of us reside. I would like to know for interest sake who is the top retail trader in the world and his/her win rate
forker is offline   Reply With Quote
Old Jun 6, 2011, 1:36am   #3
Joined Nov 2008
Re: Why only 66% approximately?

To be honest, I am within that range too. That said, a good trader told me that my method isn't good or I am not using it good enhough, he told me a good strategy has around 80% of winning trades...

What to think about it, i don't know...

On the other side I have a good r/r ratio so who cares...

It's all about making a lot of money...so should you worry for not having a 80% winning rate???

I think that as long your r/r is so high that you can have a winning ratio to drop by 10% and you still make profits you don't have to worry, but when you can't afford to let your winning ratio to drop even 1% you really need to look for improvements in your strategy or your emotions!
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Old Jun 6, 2011, 7:37am   #4
Joined Jul 2003
Re: Why only 66% approximately?

You're focussing on just one element of trading performance which in isolation is quite meaningless.

Without taking into account average win and average loss (and drawdown if you want to get real fancy and impress the neighbours) it tells you nothing.

I’d trade (quite happily) a system with a 10% win rate. (I wouldn’t actually for all sorts of other reasons, but that doesn’t detract from trading a 10% win rate system which turns a useful profit).
TheBramble is offline   Reply With Quote
Thanks! The following members like this post: trader_dante
Old Jun 6, 2011, 7:55am   #5
Joined Jan 2008
Re: Why only 66% approximately?

Win rate is a meaningless number. You should be looking at the profit factor. It tells the whole story. You can be 90% right and lose money. Here is a paper that derives how win rate and profit factor are related: http://www.priceactionlab.com/Litera...fitability.pdf

By the way, one of the filters hedge funds use for hiring managers is profit factor. They do not even look at win rate. Profit factor should be > 3, at minimum, I'm talking real performance here.
intradaybill is offline   Reply With Quote
Old Jun 6, 2011, 8:10am   #6
Joined Jul 2003
Re: Why only 66% approximately?

...or even just (pW * aW) - ((1-pW) * aL) being positive.
TheBramble is offline   Reply With Quote
Old Jun 6, 2011, 8:19am   #7
Joined Jan 2011
Re: Why only 66% approximately?

(my contribution to the string of useless numbers)

% edge == 100% - [(E(X) + $L) / $L]
DashRiprock is offline Training literature vendor (e.g courses / spreadbetting guides / eBooks)   Reply With Quote
Old Jun 6, 2011, 11:10am   #8
Joined Jan 2008
Re: Why only 66% approximately?

Quote:
Originally Posted by TheBramble View Post
...or even just (pW * aW) - ((1-pW) * aL) being positive.
This equation is equivalent to saying that the profit factor is >1. Regardless, this equation is very hard to understand its result. Profit factor is easy to understand. I mean that (pW * aW) - ((1-pW) * aL) can be so small that it doesn't make sense to trade.
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