what is a 'winning trade'?

grubs50

Well-known member
408 0
I keep on seeing different systems being peddled on the net with the guarantee of X amount of winning trades..........does that mean a minimum number of points (e.g 10 pt) per trade is guarranteed or once the trade has a profit of at least 1 point, it counts as a winning trade?..............I'm just curious.
 

jslee

Member
65 0
From my vast experiences of trading super methods I can tell you that authors will claim a win even if its one point.
To make a thousand a day is really simple..you just do 1000 per point !!!
If you want to follow something for gratis them look at the IK website

Jane
 

grubs50

Well-known member
408 0
I'm not interested in any of them .......... i was just curious about the claim......it would be a bit ridiculous if it based on at least one point tho.
 

china white

Established member
979 12
imho a winning trade is the one where U did YR best and can be proud of.

sometimes u lose money but u know both entry and exit were the best under circumstances. in that case i call it a winning trade as well.

and quite recently e.g. my luvly broker forgot abt my order and kept 10 SP futs running overnight. next morning when i discovered that I was up 5 pts - but this is a losing trade by any standard imho.
 

jsd

Active member
232 3
i think they mean it to be a trade that shows a profit on closure of position, some may allow for commissions and slippage, you could always ask them details on risk to reward stats, %Drawdowns to help show a clearer? picture in their ADVERTISEMENT. and take it from there.

jd
 

CityTrader

Established member
665 26
Only one type of winnign trade- one in which you make a profit. simple. As in the old adage "never let a winnign trade, turn into a losing one"

Hey, China - I hear the bonus rounds are pretty crappy this year- down on last year - a few walk outs at UBS, Goldmans pretty pissed off. Glad you're out? I certainly am!!
 

grubs50

Well-known member
408 0
so it basically means any trade that is in profit at the end of day even if it is by one point then?
 

cassiopeia

Active member
133 2
Beware of systems which claim a high % of winners, although they may be telling the truth this is irrelevant if the amount you win per trade is far less than the amount you lose per trade.

Only winning systems are important, this is where the overall amount of money you win is consistently greater than the overall amount of money you lose.

Some systems have a 30% success rate and are profitable others could have a 70% success rate and lose.
 

darrenf

Well-known member
481 3
Agreed cassiopa

Vendors peddle systems with a reported high win rate to make the system more marketable. A high win rate system is psychologically easier to trade - ie stick with through a losing streak. Many vendors will optimise a system to make it have the highest win rate possible over a certain period of time to make it look good. However, get it in to the real world and the win rate may not be so high and unless the total wins outstrip the total losses, the system will slowly (or quickly) lose a load of cash.

% winning trades is useless info unless you also know the average win/loss, drawdown info v total return etc. ie the full picture.
 

grubs50

Well-known member
408 0
So, in other words, the whole idea of a system having a high percentage or number of winning trades is a con then?.......It is amazing to c the different ways in which Newbies r being fleeced by the peddlers of systems and courses.
 

jsd

Active member
232 3
Grubs if you enetered a trade and its showing a point, it is winning, its an UNREALISED profit(well unrealised winner, commisions and all that, but dont hang on hoping it will move to cover costs), Just as a losing trade down a point would be an UNREALISED loser.

Traders need? to REALISE and act either way, but a loss or winner are what they are even if you havent closed out the position. Realise this and if your method is to close out at whatever point you planned for based on whatever method you employ ie price action or point stops then close them out. Realise the winner or loss, whatever time frame you trade.

Again systems simple ones do work but its " Humans who do not realise the unrealised"

Therefore the flaw lies in the individual, back to ego, being right not wanting to be wrong.

As for systems you have the ultimate one sitting between your ears, we just need to program that, then when you come to trade your method, hang your ego up before you sit down.

Jd
 

grubs50

Well-known member
408 0
I agree with u JSD but i asked the question with regards to systems that r being sold to ppl based on such claims which now appear to me not to be as clearcut as they r represented in their adverts.
 

jsd

Active member
232 3
hmmm i think the time will come when the system developers slot in Artificial Intelligence Units or AIU or perhaps even better AITU Artificial Intelligent Trading Unit into the black boxes to trade on their masters behalf, but sadly as is the world going the machines will be the ones living the experience and humans will be popping Prozac a plenty, and trying to tell the AITU "I dont care if the prices are going up and you have intiated optimum Long based on account status to date, bloody go short I'm Tired of this life"

Hmmmm
JD
Oh naturally the ad men would have to gloss up or leave out the word Artificial eventually because they'll be marketing these high cost chips at sophisticated people who know the word Artificial means False so maybe it will become a "Pentium Intelligence Trading Unit" or PITU for short.... hmmm Get Spielberg on the blower..... The machines taking over ? never happen ? science fiction? probably end up science fact.
 

darrenf

Well-known member
481 3
I am not saying that all systems that claim a high win rate are a con. It is perfectly feasible for a system to have a win rate of say 70 to 80% and be a winning system as long as the average win is not so small that 1 or 2 losing trades out of 10 turns it into a loser. You would also want to try and ensure that if the success rate fell, that you would still be breaking even or turning a small profit.

ie. if the average winning trade has a risk reward of 1:1, then the success rate could fall to 50% and still break even.

Therefore, a system that has a win rate of 80% with average r:r of 1:1 has quite a bit of leeway before it turns into a losing system.

One that has a reward:risk of 0.33:1 only needs to drop to 70% win rate to be a losing system.

A low win rate system can also be good as long as the average r:r is high enough to make it profitable. ie 30% win rate with r:r of 5:1 is better than 80% with 1:1.

Get the whole picture is what I would say and also try to ensure you are confident a system would work across a range of market conditions, not just a period that it has been conveniently tested and possibly optimised on.

One other thing I would say is that purchased systems can be psychologically very difficult to follow. ie if it is not the traders own system, they have no real confidence in it and end up not taking trades that could have been winners etc which can also lead to poor performance that is not the fault of the system, but the individual trading it.