How important is the win percentage?

wrbtrader said:
The issue is not just the strategy itself...its the entire trading plan.

Thus, you can have a strategy that loses 50% (wins 50%) but if its within a trading plan that's able to exploit the wins for example keeping the losing trades small and the winning trades big...

Thus, we had an ET member with like +70% winners but overall he lost money. In fact, he blew up (margin call) because he allowed his losing trades to be huge losers until the final one was a loser he couldn't return back from.

He didn't believe in using stops.

Therefore, if your trading plan involves minimizing the losses in the losing trades while allowing the winners to run their course to profit targets...you essentially have a winning trading plan with a questionable trade strategy.

Regardless, win/loss ratio is still an important statistic to maintain with other important statistics.

wrbtrader
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That was me back in the days, lol
 
KCalhoun said:
This is a brilliant thread, thx to all for posting,, and OP for bringing it up. It's so important. Really wish I knew all this 20 years ago.

You guys are all making great points.

Truth is there's no single correct answer, it depends on individual trading styles.

Perfect analogy is winning poker players, world champions like Ivey, Esfandiari and Negreanu all play uniquely.

There's a few things we can likely all agree on like avoiding big stops. Super insights, valuable tips, thx
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Ive always wondered what does OP stand for ?
 
volpri said:
And a fifth trade averaging down long. Another winner. Purple horizontal line was my initial entry level follow it to the left end you see the green triangle entry. The lower green triangles were additional averaging down entries. The righthand side red triangle is my exit of all contracts at one whack. Once I get at least 1 tick profit on my initial entry I am looking at exiting. Avoid greed. It will lower a win rate.


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I assume u do the averaging down through options?
 
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