Still learning so, my win% varies from 40-60%. I trade mostly, directional options thru buying call and put options. When I was going good, I had a 2 to 1 win/loss ratio and a good percentage return. I review my trading journal for mistakes to correct them. Now, I have come up with too tight stops resulting in the trade having small profits and reasonably, small losses but, win rate has gone up but, lost a few bucks. So, now, I loosen up my stops. Tighter trade selection rules too. Revised my scanning too for the strongest stocks I can find. I have maybe, 1 or 2 options trades that I close out even at times. That I just add to the win column because I did not lose monies except, the commissions which I count as the cost of doing business. I do not count the monthly return but, I reflect it as a percentage gain or loss of total invested capital which fluctuates. Observe 2% maximum risk of total capital as my position size per trade. In my case, that is $600.00 divided by the cost of the option premium. So, if the option premium cost $150.00 then, I can only buy 4 contracts for that trade.
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Win loss ratios - Results
- Thread starter Palindrome
- Start date
Still learning so, my win% varies from 40-60%. I trade mostly, directional options thru buying call and put options. When I was going good, I had a 2 to 1 win/loss ratio and a good percentage return. I review my trading journal for mistakes to correct them. Now, I have come up with too tight stops resulting in the trade having small profits and reasonably, small losses but, win rate has gone up but, lost a few bucks. So, now, I loosen up my stops. Tighter trade selection rules too. Revised my scanning too for the strongest stocks I can find. I have maybe, 1 or 2 options trades that I close out even at times. That I just add to the win column because I did not lose monies except, the commissions which I count as the cost of doing business. I do not count the monthly return but, I reflect it as a percentage gain or loss of total invested capital which fluctuates. Observe 2% maximum risk of total capital as my position size per trade. In my case, that is $600.00 divided by the cost of the option premium. So, if the option premium cost $150.00 then, I can only buy 4 contracts for that trade.
You're going to find profitable traders with win rates from less than 1% to greater than 99%. Similarly you will find unprofitable traders with similar win rates. Win rate by itself is nearly meaningless. Maybe someone has a win rate of 90%, but their annualized return is only 4% whereas someone with a 20% win rate has a return of 50%.
I only have a 5 month track record live with my current strategy and therefore I don't feel is long enough to give any credence to due to the fact that this has a discretionary component to it. My win rate is 61%. I don't do any adjustments to consider something as flat/break even.
Here's my data copy/pasted from fund seeder:
Annualized Return 39.41%
Annualized Volatility 11.93%
Sharpe Ratio 3.3
Cumulative Return 11.44%
Maximum Drawdown 4.57%
Sortino Ratio/√2 3.78
FS Score NA
Daily GPR 0.62
Monthly GPR NA
MAR 8.17
CALMAR 8.17
Expected Shortfall -1.49%
VAR -1.12%
Skewness 0.09
Daily Mean Return 0.13%
Kurtosis 2.17
Daily Standard Deviation 0.73%
EDIT to add more info:
I primarily trade equity options. I generally have positions in 10-15 underlyings at a given time and I only use about 25% of available margin on average. I noticed they don't list sortino ratio itself, only sortino / sqrt(2). Sortino ratio = 5.35.
I only have a 5 month track record live with my current strategy and therefore I don't feel is long enough to give any credence to due to the fact that this has a discretionary component to it. My win rate is 61%. I don't do any adjustments to consider something as flat/break even.
Here's my data copy/pasted from fund seeder:
Annualized Return 39.41%
Annualized Volatility 11.93%
Sharpe Ratio 3.3
Cumulative Return 11.44%
Maximum Drawdown 4.57%
Sortino Ratio/√2 3.78
FS Score NA
Daily GPR 0.62
Monthly GPR NA
MAR 8.17
CALMAR 8.17
Expected Shortfall -1.49%
VAR -1.12%
Skewness 0.09
Daily Mean Return 0.13%
Kurtosis 2.17
Daily Standard Deviation 0.73%
EDIT to add more info:
I primarily trade equity options. I generally have positions in 10-15 underlyings at a given time and I only use about 25% of available margin on average. I noticed they don't list sortino ratio itself, only sortino / sqrt(2). Sortino ratio = 5.35.
Last edited:
If your reward to risk ratio is 1:1, you'll have around 70% winners
At 2:1, closer to 50%.
If you win 80% of the time, you'll go upside down. That is, your risk per trade will grow to 2x what you can hope to gain. I'm not saying this can't be a winning system. But I am implying that it can take a very high emotional toll on you.
Easiest systems to trade are in the 40-60% winners area. Good volatility saves smaller mistakes in execution, allows you to make it up in the reward to risk ratio part.
Every trade is an event. If you take 5 separate positions, whether averaging up or against your initial position, it's 5 separate trades as far as the statistics go. Mentally / emotionally, might feel like 1 trade, but it's not, statistically.
It is EASY to add to winners in strong trends. Many ways. IMO, you should have your heaviest position near the end of a strong trend, not your lightest. You should have a lighter positions when you lose.
[Trading forums these days are a very toxic environment to share trading methods. I saw firsthand what it did to Donna (NoDoji), one of the most giving individuals to newbies I'd ever seen. I can back up my "EASY" claim, but I won't...too many nasties here...absolutely no upside to the givers. It's unfortunate, but a fact in these internet-only generations who will cut you down with not a flinch of care or consideration.]
At 2:1, closer to 50%.
If you win 80% of the time, you'll go upside down. That is, your risk per trade will grow to 2x what you can hope to gain. I'm not saying this can't be a winning system. But I am implying that it can take a very high emotional toll on you.
Easiest systems to trade are in the 40-60% winners area. Good volatility saves smaller mistakes in execution, allows you to make it up in the reward to risk ratio part.
Every trade is an event. If you take 5 separate positions, whether averaging up or against your initial position, it's 5 separate trades as far as the statistics go. Mentally / emotionally, might feel like 1 trade, but it's not, statistically.
It is EASY to add to winners in strong trends. Many ways. IMO, you should have your heaviest position near the end of a strong trend, not your lightest. You should have a lighter positions when you lose.
[Trading forums these days are a very toxic environment to share trading methods. I saw firsthand what it did to Donna (NoDoji), one of the most giving individuals to newbies I'd ever seen. I can back up my "EASY" claim, but I won't...too many nasties here...absolutely no upside to the givers. It's unfortunate, but a fact in these internet-only generations who will cut you down with not a flinch of care or consideration.]