Have you got any quotes or anything to verify their ratio and % of winners? Not that I don't believe you, I'd just be curious to see the numbers.
I don't know how much I can add to this discussion above what has already been contributed, but here are some of my thoughts. To the extent that we all can agree that a successful trader needs to find an approach that suits his or her's personality, there is no one correct answer the question asked in the title of this thread. Personally, I am one who prefers to maintain a high winning percentage at the expense of a lower avg. win to avg. loss ratio. I mainly day trade and have a number of different strategies that I employ. Most have a minimally based subjective decision model, but the one constant is that each has a winning percentage north of 50%. All maintain a loss/win below 1, except for one. It is a totally objective strategy that I use to day trade the ES mini and I have employed it approximately 150 times in the last three years. The actual trading stats for the particular strategy, including all commissions and fees, are thus: Win %: 76% Avg. Win: 5.34 Avg. Loss: 7.075 Expectancy: 2.41 The expectancy # based on the above stats will be slightly lower due to rounding of the relevant stats. ((.76*5.34)-(.24*7.075)= 2.36) The reality is that the expectancy of this strategy is about the highest of any that I employ, but due to its nature I have a higher stress level when employing the strategy than I do with most of my other strategies. However, I employ it whenever the system indicates a trade because I did extensive back testing before risking a penny of real money and I now rely on the history of my real time performance with it. I present this to the forum to show that it is possible to make money with a loss/win ratio above 1. In my humble opinion, the only way to be profitable using such a profile is to be very selective about the trades that one chooses. As an example, the aforementioned strategy, on average, only presents itself once a week, but has generated over 5K annually per contract over the past three years. Again, this selective, high percentage approach suits ME, it so far has proven to be more profitable than most of my other strategies, but I have no idea how it will perform going forward. That is why money management is so important. It also, at least for the past three years, validates an approach that takes bigger losses than winners. I hope my contribution has been informative.