Better Win Rate or Higher RR ?

[tomorton]

For most traders, there is not going to be a free choice between low and high values for these parameters.

Firstly, the strategy determines what you will get out of it. Its hardly credible that some tactics could be simply ramped up at will to boost one or the other. This would just cause the strategy to fail - like putting a monster-sized engine in a small hatchback - something's going to fail.

But anyway the odds are that a profitable trader has positive values for both, while a losing trader has negative values for both. It would be difficult to find or develop a consistently profitable strategy that carried a very weak value of either, whilst still remaining profitable.

 

[KCalhoun]

True re both are good to work towards.

But from a practical standpoint I think all traders, myself included, have more stops/scratch/breakeven trades than wins. Right?

What matters is net p&l. I was profitable yesterday doing dozens of daytrades, for example, but I was probably less than 30-40% winning trades. All I care about is making more money.

If I'm winning only 15% of the time but have a net profit, that's better than a trader who had 80% winning trades but ended the day in the red.

 

[Overnight]

...

If I'm winning only 15% of the time but have a net profit, that's better than a trader who had 80% winning trades but ended the day in the red.

EXACTLY CORRECT. Win % means absolute DICK. What matters in the end is profit or loss at the day's (or trade's) close. THAT'S IT!.

 

[volpri]

Are you happy with your trading results? If so, keep at it. That is, doing what you have been doing. If not, then remember:


“If You Always Do What You’ve Always Done, You’ll Always Get What You’ve Always Got.” ~ Henry Ford

I am just not going to trade a system or methodolgy that has me losing 75% to 80% of the time even if in the end I make money.

 

[legionx]

Drawdowns do not bode well with investors and a mental perspective. 70-80 any day. Because I am not a robot, 2-3 can turn into 5-10 once carried by the daily.

 

[deaddog]

“If You Always Do What You’ve Always Done, You’ll Always Get What You’ve Always Got.” ~ Henry Ford

" I'm willing to change as long as I don't have to do anything different" ~ Most Traders

 

[momo3HC]

Both. This 2 parameters are connected.

 

[KCalhoun]

I am just not going to trade a system or methodolgy that has me losing 75% to 80% of the time even if in the end I make money.

Really????? If I make money that's ALL that matters. Profits.

I'd rather trade a system with a 1% win rate that's net profitable vs a system with a 99% win rate that loses.

I trade to make money. Percent win rate is unimportant. Net P&L is all that matters.

 

[volpri]

Really????? If I make money that's ALL that matters. Profits.

I'd rather trade a system with a 1% win rate that's net profitable vs a system with a 99% win rate that loses.

I trade to make money. Percent win rate is unimportant. Net P&L is all that matters.

Whatever floats your boat. I will make $$$ otherwise, in some other way, than trading a 1% win rate system. One for sure wants to make money but trading is more than just money. For the long haul one has to be content and happy with what they are doing. Losing 99 trades out of 100 I would be miserable. Besides what you are postulating is theoretical any. I have yet to see a system that wins 99 trades out of 100 and still loses money. I mean anyone can dream up the math numbers to make it happen such as the one loss being so big that it wipes out the other 99 wins. But that in real life would not be a system. That is called jackass trading.

In addition, if a 1% win rate makes a traders P&L be net profitable if he could get it to be 60% win rate he would make a lot more. Win rate does indeed matter.

Most of the time the argument against a high win rate is because of an underlying condition. I think we all know what that condition is without me detailing it out.

 

[KCalhoun]

i routinely have profitable days being wrong >50% of my trades, but i get your point...both are the goal, win rate & profit