High Win/Loss gives you a better feel?

Discussion in 'Psychology' started by ADX_trader, Mar 18, 2003.

  1. I saw a lot of systems that gave you win/loss ratio about 4:6. Although they were quite profitable, for a newbie, the psychological impact of watching so many losses was quite big. Is it better for a newbie to use a system with high win/loss ratio first?
  2. In my first year I was stroking my ego with 65-70% winners. Problem was, I'd book a winner - ANY winner - even 5 bucks, just to keep the winning percentage high and book a "winning trade". For every 5.00 winner, though, I had 20.00 losers.

    Screw the win:loss ratios; keep your gain:loss ratios in check and you'll suceed.
  3. just had to chime in with some agreement, this is a big point for me in trading. Win/Loss is not why you are in this business.

    When you tell your wife/girlfriend how well you have been trading, do you think it matters what your win/loss ratio is ? Hell no, what matters is how much cash you have settled in your account.

    Are you in this for masturbation purposes or are you in this to make money ?

    Trading is entertaining, it has a gambling thrill involved. Winning feels good and feeds the gamber instinct, which can then lead to a complete blowout. It has happened to me, though luckily I didn't have much money when it happened so it only cost me about 6 grand. Still to this day I wish I had that 6 grand in my checking account.
  4. nitro


    I have a method that gives me 85% winners and about 50K a year. I trade this along other style(s.) Outside of the money, the one thing that it resonates mostly with me is the theory that the markets are efficient is CRAP.

  5. I agree with the sentiments of Brother Nitro...
  6. I usually keep a record with all my trades and put them together based on performance and other factors.

    My % profitable is 23.6% on bad days but my Risk/Reward is 9.7. I would take a scratch or 2-3 tick loss. Also, take the major part of the swing of the move. It works great because I'm a very good loser...

    When I have major mojo I have a 100% profitable day with a 1000000000+:0 RRR...

    But when I traded as system trader for a week. Total % profitability was 48% and RRR was 3.3.

    I am a intraday trend-follower. No trend... no trade... That's why I have a high RRR. If you're a scalper like Nitro, it's a different story.

    Honestly, it's a depends more on what kind of style you would like to trade under. More profit taking = More frequency and Profitability. If you have patience and discipline to follow (it's to follow... every trade needs discipline. If you scalp, you are tempted to keep a winning trader.) = Go for High RRR with reasonable % Profitability.
  7. There's something to be said for a system that takes regular small losses. I find that if I've had a straight run of more than a handful of wins - I don't take the subsequent (inevitable) loss as quickly as I should. Sounds silly but I need to keep practicing taking small losses - otherwise I'll end up taking bigger ones.
  8. very true, that's what i was talking about with the "gambler instinct".
  9. Just make a system that fits your style.


    Just change yourself to fit the system.
  10. Win Rate = wins/total trades
    Avg. W/L Ratio = avg win/avg loss
    P/L Ratio (ABS)Sum of wins/(ABS)sum of losses

    Michael B.
    #10     May 12, 2003