How important is the win percentage?

[Slope Trader]

The unusually high win rates that blow up are caused by the trader getting win rate tunnel vision. Their ego ends up getting the best of them. The cocky trader bragging or lying about their 90% win rate is never around very long - natural selection at work.

To pull it off they take smaller & smaller profits, let losers run in hopes of a rebound, & add on to the losers - eventually a loser runs so far they blow up.

This conversation reminds me of the crazy story regarding trading guru Robert Hoffman that sent the electrons flying in the trading world several years ago.

https://www.elitetrader.com/et/thre...-lose-312k-in-a-single-tf-trade-yikes.223845/

 

[KCalhoun]

So what's the top 3 performance metrics you look at when evaluating a new strategy?

Main thing I pay attention to is account balance and daily P&L.

Also:
R:R of pattern entry signal related to trading range and volatility

Profit consistency potential relative to similar patterns recently traded

Relative strength vs alternatives


Re ranges eg see 90d range during selloff, I bought MGM near $7 because of wide range chart, similarly I think there's big upside in inverses like SDOW SRTY SPXS etc, am now waiting for 2day highs to scale in

 

[SimpleMeLike]

Main thing I pay attention to is account balance and daily P&L.

Also:
R:R of pattern entry signal related to trading range and volatility

Profit consistency potential relative to similar patterns recently traded

Relative strength vs alternatives


Re ranges eg see 90d range during selloff, I bought MGM near $7 because of wide range chart, similarly I think there's big upside in inverses like SDOW SRTY SPXS etc, am now waiting for 2day highs to scale in

Yes I am long MGM at about $10. I am going to make alot money on it, when it goes to about $50 a share, hopefully in a full years.

 

[KCalhoun]

Yes I am long MGM at about $10. I am going to make alot money on it, when it goes to about $50 a share, hopefully in a full years.

I'm kicking myself for not buying more MGM under 10, bought a little yesterday into the close, will scale, it's a slow mover, may recover to 30s over long timeframe 4-6 months, will sell if loses 12, good luck!

 

[SimpleMeLike]

I'm kicking myself for not buying more MGM under 10, bought a little yesterday into the close, will scale, it's a slow mover, may recover to 30s over long timeframe 4-6 months, will sell if loses 12, good luck!

Yes, I understand

I did not want to buy all at once either. So I just been buying in partials as it dips. But I am done investing in MGM. Now just time to hold it.

 

[never2old]

there's a tastytrade youtube video interviews that one 'Rising Star' claims 80% win rate 24% P&L

is it about win rate or overall P&L or a combination, with what minimums for each are considered great?

 

[Trade Prophet]

Trade Prophet,

YESSSSS, yesss, of course I do. YESSSSS.

If you are not tracking your trades and the stats, you are bullshitting and wasting time for real for real.

I can not build confidence and trust what I am doing without measuring the performance of what I am doing.

You have to find 1 trading style and get profitable with you are comfortable

Love your honesty, work hard and dream big, sounds like you are determined to win this and you will, best of luck

 

[gaussian]

I really think that it needs to be greater than 50 percent for most traders. I say that because most traders have rather imperfect position management. Another factor is that for most trading systems the winners are not substantially larger than the losers.

Counter-point: percentage matters less than expected value.

This is sort of the idea behind poker and other table games. Your edge might be 1%. But if the expected value of the game under advantaged play is positive you will make money so long as you have a bankroll to take in the volatility.

Win percentage is a nice metric to tell the props though, and to be fair expected value in a trade can be hard to nail down in concrete numbers. But again, if you win 98% of the time, but 2% of the time you lose more than you gain, you're in a negative expected value play.

 

[KISS]

most important is the ' average loss'. or the one bad trade. can blow your account.
never average down. cut losses.
and not able to stop trading when trader is somehow in a losing streak for some reason. they've loss control.

 

[Sekiyo]

Counter-point: percentage matters less than expected value.

Counter point : Expected Value matters less than Betting Size.

You said it though:
You will make money so long as you have a bankroll to take in the volatility.

Do Not Over Bet.

"Betting too much, even though each individual bet is in your favor, can be ruinous"
-Edward Throp

Get profitable (Statistical expectaiton)
Size properly (Risk Management)
& Compound