Good you should apply for the Nobel prize. Do they have one for trend followers with a 70% win rate? Unless you don't understand what trend following means in which case you are excused due to ignorance. BTW the expectancy formula your sim results rely on is a very simplistic, almost useless equation because it assumes normality and stationarity of R:R and win rate. Usually people who have never traded and never kept a trade log refer to that formula as significant. If you ever start trading real money for a while and you keep a log of your win rate you will see it changes all the time together with R:R.
HTR, You and I agree completely and are saying the same thing. I am only pointing out that Probability of trade winning is NOT irrelevant. All pieces must come together. Yes you could lose money if that were the only thing working in your favor. I'm just trying to provide DATA to show what Probability effects in a traders system...that is basically drawdown and volatility of a trader equity swings. IT IS NOT THE MOST IMPORTANT FACTOR...we all seem to agree on this point.
You can make up whatever formulas you want to address trading however you view it in your head but these formulas I have given are not made up. FYI,...your formula is for the slope of a line....y=mx+b.
I am sure you could show how the MAX gain from such a system is profitable but at the cost of DRAW DOWN!!!!!!!!!!!!!!!!!!!! THAT IS THE POINT PEOPLE!!! Win rate effects DRAW DOWN and volatility swings in your account's equity. IT DOES NOT EFFECT OVERALL PROFITABILITY OF A SYSTEM!!! I dont know how much more clearly I can say it than that. We are (or should be) in the mindset of RISK management. Part of risk management is risk per trade. Well your risk per trade based on your system stats will greatly effect the RISK you have of ruin because of large draw downs. Again,...nothing to do with PROFIT,....it has to do with RISK OF RUIN....DRAW DOWN!! If you still do not get it then you are not meant to be a trader. Go back and read all the evidence in front of you that I have presented over the last couple days. I do not want to argue on here but it gets frustrating having conversations with people that dont know WTF they are saying, AND provide no data to prove their point. If you guys know so much post up a MC Sim showing what you mean and we can have a meaningful discussion. I am willing to learn. I have even provided the link to the same MC Sim I used. Educate me. I will repeat one last time...ALL OTHER FACTORS BEING EQUAL IN A SYSTEM THEN A HIGHER PROBABILITY WIN WILL BE BETTER THAN A LOWER PROBABILITY WIN BECAUSE THE VOLATILITY SWINGS IN YOUR ACCOUNT EQUITY AND OVERALL RISK OF RUIN AS DEFINED BY MASSIVE DRAW DOWNS WILL BE LESS IN THE HIGHER PROBABILITY SYSTEM! NOTICE I SAID NOTHING ABOUT PROFIT!!!
I do trade with real money and make good money doing so and have been doing so for years now. You can call me ignorant all you want but you have failed to enlighten any of us with any data. I have already said I agree that the MC Sim does not account for a fixed risk ratio position sizing that most should do. I also mentioned I have another MC Sim that is not free that does account for this and the results were basically the same except you bleed more slowly to the point of ruin with a 10% system. I am not here to force you to believe what I think and dont really care to do so. Many people on here have no F...ing clue what they are doing. At least I have provided HARD DATA and proof to express my point. Has anyone else?,...NO It is up to each person to decide what they want to believe. I am not selling anything and dont intend to. I have joined this site only recently as an outlet to speak to what I thought would be other like minded traders. But I see many on here are just flying by the seat of their pants with no real understanding of what is involved in forming a RELIABLE winning system with minimal risk of ruin.
Let me correct this,...."you could have a win rate of 0.000000001% and still be profitable" THAT too is a TRUE statement. Only problem is that is also called the POWERBALL LOTTO. Do you trade lottery tickets? Again,...profit is not effected by win rate,...just your risk of ruin and draw down. You have to pay for A TON of lottery tickets before you eventually win unless you are lucky. Trading should not be a luck game. Its all about controlling risk per trade and risk of ruin (however anyone wishes to define that for themselves)