I find that even if you have a decent win rate 50-60%, most profits will come from 10-15% of winners?
Do most of your profits come from a small % of trades? My long term win rate is approx 50% and the bulk of my annual profits come from about 10-15% of all my trades - the other smaller winners basically cancel out the losing trades. This is right on par for the best swing/trend/position traders out there - at least those honest with their numbers. With decent $ mgmt and a bit of luck this is all you need to have a stellar year.
Long term commodities my profitable percentages are 5-15% any year past 25 years, and 5-15% are bulk of profits. Stocks are very different.
This is quite common, but of course depends on whether/how you set targets, and on your R:R ratio, too. (Clearly it wouldn't be true at all of many traders who have fixed targets for every trade; nor for scalpers.)
That might possibly be true collectively, over all profitable traders' profitable trades (though even there, I doubt it, to be honest), but it's very clearly not true of many professional traders' profits, such as scalpers and all those with fixed targets.
I always found stocks easy to trade, sharp declines happen, let's face it-brokers be out of work if declines were like bull markets with steady slopes up. People are so funny in my mind as they think all happens for little reasoning, but it is like a baseball game and food carts, you can eat most things by end of 7th inning and then after they don't make more and sell off inventory which "they" have science or spreadsheets on how much to have left by end of 7th inning. People decline buying end of 7th inning as the product gets cool or not as fresh. Stock market same way, market increases and so long as "product" still fresh, people keep buying, longer they can keep market going up, longer customers buy. Like a hot dog on spindle, longer it there, quality declines like stock market and people stop buying and there goes huge bonuses and layed off when market is in bear decline. Stocks go up 2/3's of the time, ya want to bet on which options go down the most? So once you figure out different markets, timeframes, the boredom becomes increasingly worse, nothing more boring than to be in 7th years on stocks, yea on paper value going up, more dividend income, more decaying puts, more hedging of open profits when you have signals, but at some point the boredom becomes what is the sense of doing this. So you start going toward areas of more challenges exist. And it is true I became broke several times in late 80'/early 90s due to learning how to trade commodities, all the stock profits were be eaten away on my stupidity not to learn how to program. Plus, I knew charting well, but if you going to trade smaller timeframes, best to dissect swings and you learn more. Oh, and when you "own" real estate, you are deep in debt and the deeper you are in debt the better, so long as you keep 100% full and have cash reserves. Yes, some commodity trades I been in over seven years, lots of rollovers, check out Eurodollars, they were very high for number of years and I been selling, you thankfully forced to learn to do spreading, and options if you want to make any money as some markets can be sideways for a very very long time. These are actually gifts in a way so if you have open mind, you learn to adapt but most Americans can't seem to adapt, let's face it, we have such a rich lifestyle, our people have become lazy. Not rich that all have millions in the bank, but many don't work at all. Am sure not many cept those who have PM'ed me they trading now my approach to very long term commodities, I have fairly large first targets and exit now 10% of my position, use to be 50%, so a healthy retracement can nail this target 15% on average, this helps when hedges fail. So like when ES drops 40 points from entry, 10% exited. There is no second target, you do enough back testing the huge profits happen from having breakeven stop till the very end. I take last 9 years high/low and I am going to exit with min of 75% of the move and at some point reverse and that is where the fun happens again, finding the extremes. So someone asked me what is the R:R, really hard to say, anything I trade over 59 minutes gets hedged, the hedge is supposed to lower the risk, so say without hedge crude oil-am risking $1000, depending on strike prices and prems, the then risk is an unknown but risk will get smaller than $1000, and 75% min, can turn out to 75 to 110% if prices goes below 9 year extremes if a pattern does not happen till then to reverse. As you rollover profits/losses occur and on spreadsheet I view as open positions even though they closed trades, and if other patterns happens, add-on trades occur, all automated. So you eventually get good at what you are centered on, then off to even smaller timeframes, so scalping by far most challenge at the time, and when you finally crack the nut, you think "that was it"? So it is very fun to jazz systems up, start anew on how to trade, whether price action- using slope for trend, then hey let's use TSI(True Strength Index) for trend, they hey let's use Donchain for trend, then Bollingers for trend, etc, signals can change cause you mix up chart patterns or indicator patterns, you take stock indicators and figure ways to make work on intraday, that's fun to be able to find patterns you never thought about before. Seldom have I had to make money trading, always had other things going on for income, I think this has made huge difference as well, less stress, but never enjoyed actual manual trading, automation is like a paint drying, check it end of the day or early in morning. Now working on hedging, not cause I might ever will, but how much can I actually hedge in billions to have as close to zero risk, what is it going to cost and what has to happen for risk to get to zero OR positive expectation. You have to think outside the bun. Yeah, here it is, nearly forty fucking years of this game and only last few years I have started to truly love playing it. You reach certain age, don't care what people say about you, too often they either jealous, or think no one can make it happen, or why the fuck are you even here-should be out spending it, living in their mind the "good life". I didn't grow up that way, I feel funny when it comes to money, lost concept of value for it decades ago, it changes people often for the worse cause so many "friends" are seldom friends. And way too many think if you have the edge, never going to share it. I don't share nuances, too many people eating one pie, my piece gets smaller, I don't share stats cause some smart person can figure out my nuances. You not going to learn much on price action by looking at my stats, learn to program and make your own stats, learn about MAE/MFE, open your mind and it not always about best number of points for protective stops-How about testing for best percentages to use for protective stops. How about not putting in protective stops before the market opens? If gaps against you, 50/50 changes your exit is low of the week, wait 10 minutes then put on stops below lows if that is where you wait them. So much of trading are simple but never thought. And those who don't trade but have something to say, keep it coming and what forums are about. You be surprised at how many ideas I have gotten from those in testing phases or just come here for fun. And those that don't like me, tough shit-put me on ignore. I thought for sure I wouldn't be coming back here for long time, now have 7mm kidney stone and due to radiation, upper teeth all have cracked then removed, just won't heal and infection, no choppers.