What is a Win Rate?

Quote from NoDoji:

To bet profitably, you need an edge. With a 50% win rate, you need a risk:reward edge. If you bet $1 on each toss, but win $2 above your initial bet for every appearance of heads, you have a significant edge and should end up quite profitable over time.

If it takes 15 seconds for each toss to be completed, you have plenty of time to bet, but you only have $10 in your account, you can quickly lose everything despite the favorable edge.

If you have $100 to bet but can only play the game for 5 or 10 minutes of each 25-minute/100-toss session, you can also lose everything despite the favorable edge.
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It depends on the ratio of bankroll to bet size. Win rate is very important.

If you have only $2 and a win rate of 50% and you lose $1 you have probability of ruin 25% before you even see any profit. This si just a trivial example to illustrate the problem.

For any starting capital C, the probability of ruin is a function of win rate, bet size and avg. win to avg. loss ratio.

Actually, the probability of ruin decreases as a function of the win rate, often exponentially, so all this talk about win rate not being important is nonsense and usually propagated by some individuals who have no concept of trading in the context of probability theory.
 
Quote from intradaybill:

.....For any starting capital C, the probability of ruin is a function of win rate, bet size and avg. win to avg. loss ratio......
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Is there a formula available which calculates probability of ruin?
 
Quote from themickey:

Is there a formula available which calculates probability of ruin?
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Many. But you don't need them. If you assume your probability of ruin is 99.99%, you are right within 95% confidence.

The more interesting problem is the time it takes for 100% ruin.
Is it 1 month, 1 year, 1 decade or 1 centrury?

In this life 4 things are certain:

1. Death
2. QE
3. Your wife will sleep with a younger man
4. 100% Risk of ruin
 
Quote from intradaybill:

....

In this life 4 things are certain:

1. Death
2. QE
3. Your wife will sleep with a younger man
4. 100% Risk of ruin
More...


5. Taxes
6. Government agencies full of incompetents and controllers
7. Sheeple lose more of their freedom as time goes on.
 
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