congratulations. you've managed to beat 99.9% of professional traders and
you're asking simpleton questions..
you're asking simpleton questions..
Question about my 65% win rate and 1-1.5 RR ratio
- Thread starter addminuslast
- Start date
I’m still broke as hell though
how?
You cannot increase your winning rate or your profit target artificially, or even change the size of your stop.
The optimal value for your stop and profit target must be determined by your backtest, and your backtest only, assuming your trading system has a mathematical edge to begin with.
Also, keep in mind that the winning percentage is totally meaningless as far as the profitability of a system is concerned.
You goal as a trader is to make money consistently, not to win frequently (although it does not hurt).
Are your stats based on backtest results or forward test results?
If your stats are correct, you have an excellent expectancy of +0.625.
Don't try to improve it. Just use Kelly for your position sizing. For an account with a $10k, you should optimally be risking approximately $4,166. You do the math between your entry, exit and the $4,166 and determine your position size accordingly.
This $4,166 is a 100% Kelly, if you feel uncomfortable, then use a smaller fraction of it.
However, beware, you need to recalculate this amount after every trade (Because it's a function of the account size). And if your strategy stats turned out to be not realistic, this will bankrupt you. You also must understand that account swings will be very violent, so your equity curve will not be smooth.
If you trade more than 1 instrument, you can simply equally divide the to be risked amount between the different trades you are taking.
If your stats are correct, you have an excellent expectancy of +0.625.
Don't try to improve it. Just use Kelly for your position sizing. For an account with a $10k, you should optimally be risking approximately $4,166. You do the math between your entry, exit and the $4,166 and determine your position size accordingly.
This $4,166 is a 100% Kelly, if you feel uncomfortable, then use a smaller fraction of it.
However, beware, you need to recalculate this amount after every trade (Because it's a function of the account size). And if your strategy stats turned out to be not realistic, this will bankrupt you. You also must understand that account swings will be very violent, so your equity curve will not be smooth.
If you trade more than 1 instrument, you can simply equally divide the to be risked amount between the different trades you are taking.
Agree. He should be a bilionaire soon!
it's a mirage if your win rate is over 55% while RR is close to 1. that just does not happen, even for Renaissance. most likely you have too small of a sample size.
but to answer your question, your win rate and RR are typically inversely related for most strategies. so increasing one will decrease the other. doubling down, pyramiding and other different betting/sizing strategies might improve one of these metrics without damaging the other...
??
So according to you, trading systems with a 55% (or more) winning rate and a 1 to 1 risk/reward ratio do not exist?
In other words, you are basically saying that the markets are random and cannot be timed.