LOL,...I know you and I have different objectives but you must learn to be happy with making money and as you seem to say GOOD money. NO ONE is perfect. Even Babe Ruth had more strikeouts than anyone else in his time. Yet he was still a great HR hitter. You should learn to praise your accomplishments and REALISTICALLY evaluate your losses and improve where you can. I am not saying settle for second best just to not be so harsh on yourself. Thats all.
Irreleavant statistic. The most important ststistic IMO is the profit factor. Must be bigger that 1.75. Then you are doing well. You can have 90% win rate and still get ruined.
It IS an irrelevant statistic. I voted less than 5% just for the sake of it. Now you are free to assume that I'm a losing trader just as you are free to assume markets will go up on Monday
Maybe but what the majority does is another irrelevant statistic to me. Majority in terms of a number does not equate to majority in terms of ability to move the markets. On Monday even if all traders in the world and investment managers decide to sell bonds and the FED starts buying, bonds will go up as it happened recently and everyone will lose money to the FED. Well, it is a relevant statistic (win rate) if you restrict your sample to winning traders and then from that you can deduce a lower bound on profitability. Is this what you are trying to do? However, the sample is not restricted to winners here.
It absolutely is relavant!!! It is MUCH harder to face ruin with 90% win rate than 10%. It all factors together is my point. All of these issues, profit factor, expectancy, and probability of winning trade, and standard deviation between each trade's win and losses also play a role in your overall performance. However, a higher win rate reduces drawdown which HELPS reduce your volatility of your account's equity. The more times your trade is a winner (even if small) will minimize your string of losses and minimize drawdown. With lower probability trades you need bigger profit wins to make up for the multiple losses in a row you would face. I would MUCH rather have a system with 0.3R expectancy and 90% win rate than a 0.4R expectancy and 10% win rate. Lets say you have a system that has 0.3R expectancy so in 10 trades you have 9 that make on average 0.44R and one 1R loser with total win of 3R in 10 trades = 0.3R Now take a system with 9 losses in a row of 1R each. Your last win would have to be 13R to make up for the 9R losers and make4R divided by 10 trades = 0.4R expectancy in 10 trades. However, because each trade is INDEPENDENT of what occurred on the prior trade it does not matter whether the prior trade won or lost as the prior trade does NOT INFLUENCE the next trade. So your chance of a loss is STILL 90% on the next trade. You easily could rack up 20+ losers in a row with this system and likley only rack up a max of about 2-3 winners in a row. Over 10,000 trades this may all even out but few of us would have the conviction to trade a 90% losing system with HUGE drawdowns of 20 losers in a row or more. Do a Monte Carlo analysis on a system like this and you will see what I mean. This is a poor system to trade...you are better off flipping a coin (50:50) for your trade direction. This has been explained in GREAT detail in "The Definitive Guide to Position Sizing" by Dr. Van K Tharp for those that are interested in reading more about this. Again, probability is NOT the end all be all of trading but it sure as hell helps!!!
No, absolutely wrong. It depends on R:R and risk percent. Win rate can be 10% but avg. losers .1X avg. winners. In this case the profit factor is 1.11, a profitable startegy. If in addition 0.1% of account is risked per trade, ruin is improbable. Win rate 90% and avg. winners 0.1x avg. losers (typical numbers of suicidal scalpers and geek day traders). Profit factor is 0.9, a losing strategy. Ruin inevitable. Win rate is irrelevant as far as ruin because money management plays a role there. I don't need to read books to understand simple math.