Does win rate matter much in trading?

huge subject.........and you have to realise the Stats in hindsight do not reveal the huge psychological effects of win / lose rates on individuals and how it can impede any progress as a trader

its not what you make its how you make it that matters for the long haul.....;)

N
 
It really cant be answered in a yes or no way. Have a look at the performance on sites like Zulu,currensee,etc it will give you an idea. I have several methods,all have different hit rates, but overall I am not much above 50%,some have 25%,some have 98%,just depends on how you trade. The only objective is to make sure you hit rate produces a positive outcome.Money management is the hardest part of this game.
 
From the traders I know, they dont use stop loss (or use it just in case of 'accidental spike' not for risk/reward) or the risk/reward is 1/1
This means win rate is everything for them
 
I think win rate is not something to obsess over. In recent months my best returns came from a month with a 50% win rate. If you want a massive win rate, you can get one very easily, and go broke in the process. LoCo Hoco, a recent would-be guru, was a good example of this.

However, the lower the win rate, the more discipline and balls (for want of a better word) you need to push through the losing runs and drawdowns.
 
I did not think more about trading win rate so far. I just set my profit goal and count number of wins and loss. So, it does not matter for me.
 
The Leopard said:
I think win rate is not something to obsess over. In recent months my best returns came from a month with a 50% win rate. If you want a massive win rate, you can get one very easily, and go broke in the process. LoCo Hoco, a recent would-be guru, was a good example of this.

However, the lower the win rate, the more discipline and balls (for want of a better word) you need to push through the losing runs and drawdowns.
Click to expand...

L

i'm scared to ask......but I will :rolleyes:
 
The Leopard said:
Don't tell me you don't remember the one, the only, flight-school trained Howard Cohodas?
Click to expand...

And he was selected for an official t2w interview, which graced the front pages of this forum for many a week !

He picked up a few pennies from in front of the steamroller, until the fateful day arrived when the road was a bit slippy, and he wasnt paying attention, and it all ended in tears (mainly tears of laughter).

lets not forget the travel website, the exercise treadmill, tales of daring do flying spitfires in the war, and the multi coloured switchboard. He was quality lulz.
 
NVP said:
huge subject.........and you have to realise the Stats in hindsight do not reveal the huge psychological effects of win / lose rates on individuals and how it can impede any progress as a trader

its not what you make its how you make it that matters for the long haul.....;)

N
Click to expand...

Yes, you have a valid point there. The psychological effects can be challenging, especially for newer traders. However, as one becomes more experienced, it becomes easier (and more important) to be more mechanical about the system, just trusting in the simple fact that that mathematics will work over the long-term (assuming one has an actual long-term track record).

Deron
 
Lord Flasheart said:
It really cant be answered in a yes or no way. Have a look at the performance on sites like Zulu,currensee,etc it will give you an idea. I have several methods,all have different hit rates, but overall I am not much above 50%,some have 25%,some have 98%,just depends on how you trade. The only objective is to make sure you hit rate produces a positive outcome.Money management is the hardest part of this game.
Click to expand...

Exactly. That was my whole point...too many traders simply focus on the percentage of winning trades, but that does not guarantee consistent profitability. The shorter the time frame, the higher the hit rate (generally). However, if one cannot let winners ride and cut losers quickly, even a batting average of 80% can result in net losses.
 
in the end the only thing that matters is the amount of dollar in your account at the end of the trading session. its not about what you win its about what you don't lose.
 
The Leopard said:
LoCo Hoco, a recent would-be guru, was a good example of this.
Click to expand...

did howard go broke?

i did like his swiss tonyesque intros to his posts to paraphrase....."trading is very much like flying a twin turbine kingair 300" or smthg like that. loved that thread also - professional options traders v a vendor who didn't understand options.
 
The profitablility of the system is the primary factor I consider a strategy.

I've seen many profitable strategies that have a higher loss rate.
 
Higher win rates generate feelgood factor.

That suits my personality. I am sure others would be fine with 10 losers for every big winner. I know that's something I wouldn't enjoy.

It is also true that with a higher win rate method, you'll know if things are going wrong in less trades than a lower win rate method.
 
morpheustrading said:
Does win rate matter much in trading? Only if the avg. winning trade is not significantly larger than the avg. losing trade. Here is my objective formula for rating one's trading performance, and a few thoughts on the subject...

How to measure trading performance results | Proven trading system
Click to expand...

For a moment I got very excited about the return for every dollar invested thing and I thought this should be incorporated in a program I was testing. I contacted the program author and the response I got was that this is just the profit factor and he promised to write up something about it. Here is the link to a post I just got:

New Metrics that Make Sense are Rare | Price Action Lab Blog
 
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