1:1 Risk:reward gives me a 90% win rate but...

metatrader54 said:
So how long would work? I've backtested it over 10 years of data across multiple currency pairs?
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I am not the one who can answer your question precisely since I am an amateur newbie trader, not a professional or a statistician. Your method could be skewed by the bull market, or world economic situations (QE everywhere) of the last 10 years.

I can speak from personal experience. My method worked, for the past 6 years trading options, but if I used it to backtest the period from 2007 to 2009, it failed. It also failed going back to 2000. In that regard, I can conclude it probably won't work going forward. I don't think I have an edge, just luck.
 
ironchef said:
I am not the one who can answer your question precisely since I am an amateur newbie trader, not a professional or a statistician. Your method could be skewed by the bull market, or world economic situations (QE everywhere) of the last 10 years.

I can speak from personal experience. My method worked, for the past 6 years trading options, but if I used it to backtest the period from 2007 to 2009, it failed. It also failed going back to 2000. In that regard, I can conclude it probably won't work going forward. I don't think I have an edge, just luck.
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What time frame are you doing? Because I focus solely on 1 hour and below, so "skewed by the bull market, or world economic situations (QE everywhere) of the last 10 years.", don't think it affects my method that much, I do long and short.
 
metatrader54 said:
Nope, with say a 1:3 ratio, you’d get around 18 R per 10 trades for a 70% win rate. 60% and you get 14R etc.. so 6-7R really isn’t much IMO.
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If you get at least 2 signals per day on average, 6-7R should be plenty risking 1-2% every trade. Not sure why you are so unsatisfied with your results unless you are trying to double your account every other week.
 
NeedToLearn said:
If you get at least 2 signals per day on average, 6-7R should be plenty risking 1-2% every trade. Not sure why you are so unsatisfied with your results unless you are trying to double your account every other week.
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Yea, but always shoot for improvements, what you can do better, psychology, system etc.

Don't want to be stalemate and get complacent or such.
 
metatrader54 said:
Currently my take profits vs stop loss are approximately 1:1, it is set according to market structure which happens to often be approximately 1:1. I get a pretty decent win rate with this (easily over 80%), however whenever I try to optimize it or "let winners run" it turns to shit, I probably get way less than 50% win rate with this.

I trade with the trend, but not the trend (if that makes sense), I don't try to follow and ride the trend, that fucks me up somehow.


Attached is somewhat a basic idea of how I trade. (When I say basic idea, it is VERY basic)
Entries are at red lines (with first 3 longs, the rest shorts).

Take profits are at the previous highs/lows after entry, therefore I don't really ride the trend but still use the trend as "confluence", the risk:reward isn't good because of this.

How do you guys recommend to optimize? Definitely a higher RR ratio would be preferred. I have thought of using different sessions as movers/new highs or lows during NY/London, or using news as a catalyst for a new high/low, however didn't find anything useful. What do you guys think?

I also find that if the candle is unable to break the previous high/low with the wick trying to breakout then closing below the previous high/low, it's some indication that I should be ready to take profits. (which is what I currently do), if not I'll just let the trade run. There's another method I use to take profits and often gives me a 1;1 as well, it's pretty accurate too, so the problem might be which setups I should take not how to know which setups to run them with the trend.

I can get pretty good entries as well, (price often reverses at most few pips against me after I enter, so I'm able to tighten my stop loss). Or I should just start with a small stop loss since I'm able to get a good entry often? This is something I don't really want to do because as I trade FX, I'm sure there tends to be "noise", or spikes, or such during the day, since I already trade H1 time frame and below, I don't want to be taken out of the trade easily.


If some of the more senior traders could give me some ideas or advice that would be perfect. I having a feeling that I have to think more of a market structure approach, things on the chart that show whether the trend will continue or not, but unsure how to move forward.

View attachment 205225
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Your chart hints @ trend following plan that can be + has been profitable for long periods of time- with stocks /ETFs anyway.May or may not work for forex.

Many millions/billions are made that way off monthly/yearly charts/stocks/ETFs, using your line chart. May or may not work with forex; I remember Don Bright Daytrading Co did not like forex.He used stocks/S&P 500 futs.
 
Update: Been testing another method of exits, combining higher time frame with lower time frame entries and risk management. Seems to be working well, win rate is lowered slightly but am able to easily get 2-3 RR per trade.

Of course not enough forward test sample size to confirm anything, but will continue forward testing.
 
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