Waht PF shoul I aim

a few comments
first sorry for my bad english i write fest so i miss letters from time to time also i'm not american,
second you all misunderstood me, my current R/R ratio is worse then 1:1 not better! as i clearly explaind I risk 13 loss for a 10 dollars reward (the numbers, of course are just an example) . this is why i Don't feel too comfortable with it.
second this R/R includes commisions and slippage (without them it's about 1.1:1 or even 1:1) and the Instruments i'm testing it on is currently the SPY, ES and NQ ,currently mainly on SPY testing for about 3 months and about 1000 trades so far and the results are as i described.
i do feel very comfortable with the system itself and i love trading it but i fear that this R/R ratio is not good enough and I'm doomed to fail in the long run so i wanted to hear the advice of some more experienced traders.
Hope I'm clearer now and look forward to your comments.
 
Oh, my mistake. I misread your statement.

You should backtest the strategy for a few years. You'll have a much better idea then. I find that R:R is more for psychological comfort and doesn't play as much as a factor in how well the system performs (as long as its not totally skewed to one side). I'd be more concerned with factors such as Profit Factor and Max Drawdown.
 
Quote from bespoke:

Oh, my mistake. I misread your statement.

You should backtest the strategy for a few years. You'll have a much better idea then. I find that R:R is more for psychological comfort and doesn't play as much as a factor in how well the system performs (as long as its not totally skewed to one side). I'd be more concerned with factors such as Profit Factor and Max Drawdown.
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Thanks, according to my calculations the PF is about 2.2 now and the max drawown is pretty small (never had more then 2 losing trades in a row) what numbers should be my target in terms of PF and MAX DD?
 
Quote from John Paterson:


In his case, PF = 0.7 x 1.3 /(1 - 0.7) = 3.03
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John, did you read the original post? You've got it backwards. His win to loss ratio is 1:1.3 so the formula should read:

PF = 0.7/ ((1 - 0.7) x 1.3) = 1.79

Still a pretty good PF. Too bad it is not likely to be achieved in real trading.
 
Quote from Kevin Schmit:

John, did you read the original post? You've got it backwards. His win to loss ratio is 1:1.3 so the formula should read:

PF = 0.7/ ((1 - 0.7) x 1.3) = 1.79

Still a pretty good PF. Too bad it is not likely to be achieved in real trading.
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thank for the "confidence" in me... I'll come back with reports... :-)
 
Quote from Kevin Schmit:

John, did you read the original post? You've got it backwards. His win to loss ratio is 1:1.3 so the formula should read:

PF = 0.7/ ((1 - 0.7) x 1.3) = 1.79

Still a pretty good PF. Too bad it is not likely to be achieved in real trading.
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You are right! Thanks, I read it backwards. Still a good PF. I think it can be achieved in real trading but not under current market conditions:)

John
 
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