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Winrate

GBPNZD short running ⤵️👇Utilising our POW reversal strategy for this trade a GBPNZD short. Trade details for current trade are shown on the chart. We are working the 2H time frame on this strategy. We're looking for the green line which is take profit target. Little red arrow is entry point and purple line is stop loss. Previous trades also can be seen on chart a long which closed for profit on the new short presenting. Trade history can be seen at the foot of this trade idea too for full transparency. In that box every trade is logged and can be viewed by clicking the tabs in the report box. You as the viewer of this idea can also do that so go ahead and have a play. ------------------------------------------ I try and share as many ideas as I can as and when I have time. My trades are automated so I am not sat in front of a screen daily. Jumping on random trade ideas 'willy-nilly' on Trading View trying to find that one trade that you can retire from is not a sustainable way to trade. You might get lucky, but it will always end one way. ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Short
by pow_removetheguesswork
EURAUD short is live 📉🙌Trade details for current trade are shown on the chart. Trade has been live since 7:00 UK time and we are using our POW reversal script. We are working the 15M time frame on this strategy. We're looking for the green line which is take profit target. Little red arrow is entry point and purple line is stop loss. Previous two trades can be seen on chart. One hit TP and one hit SL but hey no one strategy is right all the time. Trade history can be seen at the foot of this trade idea too for full transparency. ------------------------------------------ I try and share as many ideas as I can as and when I have time. My trades are automated so I am not sat in front of a screen daily. Jumping on random trade ideas 'willy-nilly' on Trading View trying to find that one trade that you can retire from is not a sustainable way to trade. You might get lucky, but it will always end one way. ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Short
by pow_removetheguesswork
Winrate improvement: Avoiding trades with resistance until TGTHey. I recently wrote "Where to target and what to do once there?". I am now looking at targets again, but not the "target" target. The "targets" that are in the way. I call them resistances, regardless of them being above or below, since they resist me making money, they resist my position, the price going further. We want to make money, so we improve on every aspect, including winrate. And how do you improve winrate? By throwing away the bad setups, those with high uncertainty, and those with plenty of resistance in the way. When there is 1 ton of res clustered if the price breaks it usually is very powerful and goes far but this is an exception I won't cover in this article. Support is possibly more important as something that gets in your way when you are trying to hold a winner rather than a place to buy something. The main reason I see why support matters when you enter a position is because the price already tested that one, so that's 1 less obstacle, as well as you are as far away as humanly possible from the next one. Going to go over a dozen cherry picked examples Example 1 - Few resistances Example 2 - Much resistance Example 3 - The generational trade Example 4 - A long story Let's zoom in I can't see anything Let's clean a little And the conclusion How old were these resistances exactly? Example 5 - The round number Investing is not "simple" Educators with their laptops on their beach say: - Don't overcomplicate - Focus high winrate - Do indicators and only that - You can trade anything just the same, compost or rates, PA or TA is what matters - 2 schools: Full naked chart or full with indicators and 26 screens - You can spend 30 minutes a day on a laptop on the beach - Have very few rules and stick to that - Elliott Waves are magical and always work From this we can derive (and I can confirm true from my experience): - Overcomplicate! You won't compete with a 3 year old fischer price business plan. - Focus on low winrate, do NOT try to win very often (confirmed by George Soros, PTJ, WB, etc) - Avoid indicators, do everything else. Note: Moving averages that everyone looks at matter - You CANNOT trade anything just the same. Stupid claim. Makes my ears & eyes cry - Don't have a chart loaded with crap and don't take a trade from a "naked chart" (check res etc 1rst) - You can spend 12 hours a day with no holiday, from your office. Absolutely ridiculous "beach laptop" - Have many rules and change them when necessary: If you break them for no reason, because "muh feelings", then you do not need to "stick to your rules", you need to quit. Because you suck - Elliott Waves are stupid and never work. Perfect example of a guy creating a system that does not work and then changing it over and over and over, it's like with scientists in denial: "If the theory (EW overall) does not fit the data (EW rules) then change the data", Interlude - About round numbers Tech company Ilika (IKA) in a presentation where they talk about their solid-state battery tech plans (inclusing looking at prod costs etc) back in Dec 2019, they had a list of risks (Actually the investing bank Berenberg Bank wrote this for them I think, "normal people" didn't do this themselves, bank analysts did): Cost Risk #1 - Cobalt price increase is a major risk The presentation is online it is easy to find. Just type "Ilika Solid-state battery technology" and probably that's enough to find it. I really like it because you see how businesses conduct their business. So what happened to them? The hedgers buy low and sell high. The (profitable) speculators buy high and sell low, but they are not stupid, they avoid selling right on a multi-decade turning point (support). Example 6 - A stock Example 7 - Reaches Target but without you Example 8 - Falls like a rock Zooming in to check something Example 9 - Because hindsight works so well Example 10 - Ugliness attracts ugliness Example final - Something clean and pretty When you are actually "overcomplicating" your trading it's when you check every support for the last 10 years and draw them all. In this example after several years this "no resistance" area continues to show no resistance and the old res do provide resistance so...
Education
by MrRenev
1
EURUSD sell in progress 👍Entry details are shown on the chart. We're only looking for TP3. Slight retrace on moment of posting this idea so lets see how this one plays out. Trade history can be seen below this trade idea too for full transparency. This strategy is a 1:5 RR but comes with a 28% win rate. I trade a plan based on the available test data to me. That data for this strategy tells me despite a 28% win rate I still have an edge as the strategy creates bigger wins than losses on average. All the trades can be found by pressing the 'list of trades' tab at bottom of the idea. ------------------------------------------ I try and share as many ideas as I can as and when I have time. My trades are automated so I am not sat in front of a screen daily. Jumping on random trade ideas 'willy-nilly' on Trading View trying to find that one trade that you can retire from is not a sustainable way to trade. You might get lucky, but it will always end one way. ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Short
by pow_removetheguesswork
Winrates required to breakeven relative to stop & target sizesTaking AUDUSD as an example here, the spread is not the smallest relative to ATR nor the largest. The formula to get a breakeven winrate is 1/(1+reward/risk). Because we want winrate*reward = loserate*risk <=> winrate*reward = (1-winrate)*risk <=> winrate*reward + winrate*risk = risk (never 0) <=> winrate = 1/(1+reward/risk) For example with a 20 pip stop, base risk to reward of 1 to 5, and 2 point spread, reward or winners = 98 pips, risk or losers = 22 pips. So the reward/risk = 98/22 = 4.4545454545... So the breakeven winrate will be 1/5.4545454545 = 18.33% That is just the breakeven winrate. Profitability will of course depend on: - Frequency: How many trades you are able to take - Winrate: How much higher than the breakeven winrate it is - Position size: Profitability does not go up the higher it goes If a strategy or trader only gets a couple of trades a year and his winrate is barely above breakeven, he will not be very profitable, and it will be very easy to lose all profits. And as the stops & targets in pips go down, the hit rates needed to actually make money go up exponentially up to a point where the trader needs to own a crystal ball and be able to predict the future. Take costs into consideration with any strategy and before placing any trade. And 1 other thing to keep in mind is spreads can also fluctuate, depending on the broker, at certain hours they can go up 3 fold, sometimes more, it can really hurt. A cool thing you may notice is with a stop of 20 pips, the spread/stop = 10% and also the winrate to breakeven is increased by 10% for both risk to rewards. Same thing with the 5 pips stop. And so on. The required winrate to breakeven increases by 100*(spread/stop)%. Easy to quickly calculate when you are considering trades.
Education
by MrRenev
FALSE Trading Expectations #3... Win Rate (continued) I lose a lot of the time. A large amount of my trades are stopped-out for a loss. This does not make me a bad trader, it actually makes me a real trader! Most profitable traders are right only 40%-65% of the time. A lot of traders understand that there will be losing trades. What they don't understand is that there will be consecutive losing trades. Even a strategy that has a win rate of 65%, could have 10 consecutive losing trades, maybe even more! This does not make the strategy unprofitable or not worth using. Conclusion... Expect a lower win rate. A win rate of around 50% is ideal. Expect to have consecutive losing trades. Also expect to have consecutive winning trades.
Education
by Samuel_Morton_Trader
FALSE Trading Expectations #2... Win RateForex trading is not a 'get rich quick' scheme. It can make you rich, but it will do this slowly. In order to make large returns, a trader may have to take large risks. High risk trading guarantees greater emotional and psychological challenges. This may lead to quick short-term profits but it will also lead to discouraging long-term losses. Too many traders expect far too much far too quickly. They review their performance and results on a daily or weekly basis, this can lead to discouragement and disappointment. Profitable traders review their results much more longer-term. Conclusion... Trading can make you rich, but it will make you rich slowly. To make trading work long-term, you need to risk a minimum. Expect to be patient. Review profits once a quarter or once a year.
Education
by Samuel_Morton_Trader
2
WHY YOUR WIN RATE IS IRRELEVANT!Afternoon guys! quick video on WIN RATE and why having a higher or lower win rate is IRRELEVANT! Alot of traders out there like to advertise themselves having a 'High win' rate when really it IS irrelevant to how profitable you are as a trader! in this example we are reviewing ETHUSD. in the one example we have a win rate of almost 50% but only a net profit of 40%... And then we chnage our TP mode where we then have a WIN RATE of 31% but a net profit of 59%!
BITFINEX:ETHUSD
by congibb
Win rate. How to stay if profit zone...This painting is quite simple, but many novices can't use it because they don't have the patience. So, they close their profitable positions with 1/1 or 1/2 risk/reward ratio. But hold losses for a long time. Hope this post will save your money and time. You can be in profits even with low persentage of successfull trades but as you see only with 1/5 ratio! Keep calm! Use predictable ratio! Become better every day! Push like and write your comments. Thanks for your support!
TVC:GOLDEducation
by Yuriy_Bishko
17
Which method is the most profitable?Same strategy. 4 options on how to manage trades. Can use anything from a really tight stop and win very often but small to a very wide one and rarely win but win big. Which method really makes the most money? Let's look at the numbers after 100 trades: Strat 1 with a ridiculous winrate and profit factor => 1 RR 95 Wins 5 Losses => Get 90R out! Strat 2 with very high winrate and profit factor => 2 RR 80 Wins 20 Losses => 160 - 20 = 140! Strat 3 with a 50/50 winrate and high PF & RR => 4 RR 50 Wins 50 Losses => 200 - 50 = 150R! I think you see where this is going... Strat 4 with a rather low 1/3 winrate and high PF & very high RR => 8 RR 33 Wins 67 Losses => 264 - 67 = 197R / 200R! If you picked the one with the highest risk-to-reward as the most profitable congratulations, you fell for the bait :D Tihi Strat 5 with a very low winrate no one wants and ordinary PF => 16 RR 16 Wins 84 Losses => 256 - 84 = 172R The best strategy is the one that makes the most profit over the years, with the least risk. Another factor is how long it takes. Every market has its specificities. In the world of forex which is my specialty the realistic risk to rewards we get are in the 3 to 7 area. Less than 3 is not that great, and above 7 does not happen without big pullbacks (that take time). A reward to risk of above 10 is really not realistic. With crypto and stocks maybe, but with Forex no. With FX the time scale I prefer and think is best is 2 days to 2 weeks. The best moves with least noise happen on this one. Crypto and stocks holding times are also much longer (you could get 20 to 50R or even more with BTC in 2016-2017 but it's a holding period not of a couple of days no it's a couple of months instead). Commodities (Oil Gold Metals Grains) are close to FX I think. Of course as with everything else the best risk-to-reward and TF is the one you do best with. Typical FX strong moves: What day traders and signal providers do: And that's a really wide stop... Can you imagine? It's so stupid to day trade for so many reasons xd Horrible trends with big pullbacks, missing out on big wins, noise all the time, wasting one's time, gambling what will happen during a few hours, awful risk to rewards no matter what, a small spread decimates them. Lmao. Bitcoin. You won't get much out of Bitcoin swingtrading (and day trading is a joke) And then stocks And then Warren Buffet If you bought Ko with 10% of your money and risked 3.3% You can still trade with 96.7% (can use leverage to pretend it is 100%), and in 10 years you get a profit of 115% + dividends. Pretty nice! I don't think trading stocks for a few days or weeks makes sense with all the gaps there are, even if you participate in pre and post markets it still gaps alot between them. Once a decade stocks go absolutely vertical George Soros said it's not about how often you win, it's about how much you make when you win. Strat 1 "always win I am a legend" (I doubt anyone wins that often with a RR of 1) => 90R Strat 4 (PF of 4) => 200R (about twice as much) And if you risk 1% each time? Strat 1 = 144.7% profit Strat 4 = 546% profit xd Not twice as much. Lots as much! GG Compare strat 2 & 4 Strat 2 80% WR & RR 2 After 100 trades we make 140 R Strat 3 50% WR & RR 4 After 100 trades we make 150 R / 7% more 1% risk => Strat 2 = 299% profit (twice as much as 1 btw) Strat 3 = 330% profit / 10% more One more reason higher RR is better. This does not mean one should be obssessed with it and then get stopped all the time and blow up. It's just that first start with whatever strategy and it's ok to have a RR of 1.5 to 2 maybe, and then when improving it over time the most important goal is to try and increase the payout. Increasing the winrate is harder and pays less. If possible ok but not the main focus. Nothing increases profit more than improving the RR. And keep in mind while trailing a stop you are doing the same as if you closed your trade and are opening a new one (so if the stop is very wide it is like having a poor risk to reward on a new trade).
Education
by MrRenev
3
Transaction History from 1 July 2020 to 10 July 20201. GBPAUD and Sell Area (1/7/2020): TP2 reached (2) 2. GBPCHF and Buy Area (1/7/2020): plan cancelled 3. GBPNZD and Sell Area (1/7/2020): plan cancelled 4. USDJPY and Buy Area (1/7/2020): SL+1 (0) 5. EURAUD and Sell Area (2/7/2020): TP2 reached 6. EURCAD and Sell Area (2/7/2020): TP2 reached (2) 7. EURNZD and Sell Area (2/7/2020): plan cancelled 8. USDCAD and Sell Area (2/7/2020): TP3 reached (3) 9. GBPJPY and Buy Area (2/7/2020): plan canclled 10. EURGBP and Sell Area (2/7/2020): plan cancelled 11. AUDNZD and Sell Area (2/7/2020): Stop reached (-1) 12. GBPJPY and Buy Area (2/7/2020): TP2 reached (2) 13. GBPUSD and Buy Area (2/7/2020): plan cancelled 14. GBPCHF and Buy Area (2/7/2020): Stop reached (-1) 15. EURAUD and Sell Area (6/7/2020): TP2 reached (2) 16. EURGBP and Sell Area (6/7/2020): plan cancelled 17. EURCAD and Sell Area (6/7/2020): Stop reached (-1) 18. EURUSD and Buy Area (7/7/2020): Stop reached (-1) 19. EURCAD and Buy Area (7/7/2020): TP3 reached (3) 20. USDCHF and Sell Area (7/7/2020): Stop reached (-1) 21. EURNZD and Sell Area (7/7/2020): plan cancelled 22. GBPNZD and Sell Area (7/7/2020): Stop reached (-1) 23. GBPCHF and Buy Area (8/7/2020): Stop reached (-1) 24. GBPUSD and Buy Area (8/7/2020): Stop reached (-1) 25. GBPCAD and Buy Area (8/7/2020): plan cancelled 26. GBPAUD and Buy Area (9/7/2020): plan cancelled 27. GBPCAD and Buy Area (9/7/2020): plan cancelled 28. USDJPY and Sell Area (9/7/2020): plan cancelled 29. USDCHF and Sell Area (9/7/2020): plan cancelled 30. USDCAD and Sell Area (9/7/2020): Stop reached (-1) 31. EURNZD and Sell Area (9/7/2020): plan cancelled Total trade: 31 Win trade: 7 (16 point area) Loss trade: 8 (9 point area) Cancelled plan: 14
by Mas_Kahfi
Transaction History From 20 Jun 2020 to 30 Jun 2020Transaction History From 20 Jun 2020 to 30 Jun 2020 1. GBPCAD entry 22 Jun: Target reached 1:1 2. GBPCHF entry 22 Jun: Cancelled order 3. GBPCAD entry 22 Jun: Target reached 1:2 4. USDJPY entry 26 Jun: Target reached 1:2 5. NZDUSD entry 26 Jun: Target reached 1:1 6. EURUSD entry 26 Jun: Target reached 1:3 7. GBPAUD entry 29 Jun: Cancelled order 8. NZDCAD entry 29 Jun: Target reached 1:2 9. GBPCHF entry 29 Jun: Cancelled order 10. EURJPY entry 29 Jun: Cancelled order 11. EURCHF entry 29 Jun: Stop reached 12. EURGBP entry 29 Jun: Cancelled order 13. EURCAD entry 29 Jun: Cancelled order 14. GBPCHF entry 29 Jun: Target reached 1:2 15. EURAUD entry 30 Jun: Stop reached 16. EURGBP entry 30 Jun: Stop reached 17. GBPAUD entry 30 Jun: Cancelled order 18. GBPNZD entry 30 Jun: Cancelled order SUMMARY: TOTAL ENTRIES: 18 WIN: 7 entries LOSS: 3 entries Cancelled: 8 entries
by Mas_Kahfi
I think I just wrote a book. PF, RR, WR, etc.Intro, you can skip this part but I think it would be interesting for you to take a quick look: Statistics estimates and formulas? Trading is mostly about emotions, not statistics estimates and formulas. Most people do not need all of those formulas, they don't need to make plenty of stats and estimates, but just focus on discipline and emotion control. I got this quote: "The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading." I agree. Analysis of broker data has shown over and over that over a couple of years 90% or more clients lost money, and often all of their money. So no point doing stats & formulas for 90% of people that will lose anyway. What they need most is discipline, to not lose all of their money, but rather just some of their money, and emotional control, to not blow their brains out once they lose everything. I can make a few quotes too: Checking a thing quickly... Stanley Druckenmiller was 46 when he did something stupid with the dot com bubble. George Soros started at 29 and his biggest (known) mistake was Stanley Druckenmiller. Oh this one is interesting.... Alot of profitable ones that got really confident after a few years of winning and got wiped out or made huge losses or missed on much returns (Buffet says BRK cost him 200 billion, he'd be way above Jeff Besos). I see alot of late 20s to early 30s. But even older than this after decades, it's never safe, never let your guard down. But most typical is the ~30 yo guy that made lots of money for years and laughs hysterically at noobs (retail traders mostly) and was warned of dangers by people trying to scare them away but proved every one wrong, knew he was at the top, one of the best in the world, so got really arrogant, dropped his guard down, and then boom. By the way, totally unrelated, should I all in short USO? It's losing money over time and already so many idiots "invested" in it. There can't possibly be more morons that would buy this dead crap right? Lmao USO investors, what a bunch of brainlets. I refuse to lose against idiots just by being outnumbered. All in no SL. 😁 How do I start a show so I can do literal pump and dumps legally like Joseph Granville? Good. Now that we got this out of the way. 1- Winrate Pretty simple here. All this shows is what percentage of bets are winners. Doesn't really account for breakeven, doesn't differentiate between small wins big wins. Pretty useless on its own. Implicitly means that every win and loss have the same size, like putting rigid entry target SL, and never touching it. 2- Reward/Risk How big is the average or expected win, compared to the typical loss. How much are you willing to risk and how much do you expect to make? Most "educators" repeat how important the risk to reward ratio is, and it kinda is, because it is one of the best predictor of success. FXCM published some data where they show that over the 3/1/2014 to 3/31/2015 period (1 year), 53% of their clients with a RR of 1 or more were in the green, while only 17% of those without were. 47% of RR >= 1 lose money. 83% of RR < 1 lose more. Their typical win % over a quarter is 25%, and the typical global win % over a year is around 20%. I would be willing to bet that profitability goes up significantly with reward to risk. Some of it would of course be simply because people that end up with a huge win on their hands balloon the high RR stats. That said, I doubt just flipping a coin, just randomly buying with a tight stop and a far away target would work. Althought... The top myfxbook systems are almost all automated garbage systems with an average win 0.20 times the average loss, that were really lucky over a long period (3 std dev of a normal statistical distribution = 0.3% 3/1000, just pick any trash system with high WR and run a binomial probability calculator find the odds of it making profit over 100 rolls). Hey I'll do this later in this idea. And as I was saying, perfect transition, flipping a coin isn't a viable strategy, the reward to risk alone doesn't say it all, even if traders using a high reward to risk ratio greatly outperform those that don't. If you make 10 times what you lose, but you lose 99% of the time, emm how to say... And this is why we must look at the profit factor. 3- The profit factor. Oh yes Pf = (W*R)/(1-W) I have seen reports with a gross PF of almost 3, and net of barely 1.1. If you design a strategy you count spreads in it... It's obvious. Day trading sucks and every analysis of day traders data shows about 1% or less make money, and don't make much. Probably the only ones making anything are level 2 scalpers, and 'experts' selling day trading robots, or signals, or courses. First a disclaimer! The argument of day trading having terrible profit factors applies to 95% of the time. When the average move per unit of time goes way way up (spreads & commissions usually don't especially if volume goes up too), and you get in 5 hours what you usually get in 2 weeks, then obviously it's different. I focus my argument on 95% of the time, when volatility is "normal" (within 2 st dev basically, and in particular within 1 - ~70% of the time) And I have been really nice here. Getting an idea of what good profit factors are... If I participated I would take a single bet with huge leverage and hope to get lucky, easy win once every couple of events, but I doubt they allow this. Lol on the worldcupchampionship site (ran by the CME I think), there are categories, Futures traders at the top have massive returns, way above Forex. Previous year winners with futures have bigger returns than FX, but this year is just stupid. maybe they blow up soon. Top 5 FX participants as of May 14 have 40% to 97% returns. Top 5 with futures are already at 200-800%! In 2018 futures winner made 250% FX winner made 200%, sometimes futures traders make huge gains. The gap is already so big lol. Anything to do with NatGas & Oil? 😆 www.worldcupchampionships.com Looking at a "war of traders" results. 27 days... Not sure what their leaderboard is. Looks like a great way to get suckers to deposit money and pay fees asap. First place has a PF of 44%, I assume this means 1.44, second place 160% I assume it means 2.6. Followed by 1.3, 1.05, 1.13, 1.26, 6.85, 1.11.... Prob easier to get a higher PF with commodity futures where they are so much hedgers, much fewer care about hedging FX risk, plus central banks use it to manipulate everything, more people trying to make money. Sometimes the sharpe ratio is mentionned. Quick definition: The Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is defined as the difference between the returns of the investment and the risk-free return, divided by the standard deviation of the investment. I looked at some hedge funds reports a while ago, since they diversify and hedge alot PF isn't as high. Warren Buffet has a PF of what? 100? He makes one trade every 10 years. It's basically impossible to find those numbers, unless you work at a brokerage, and apart from your own, with the exception of the few times a broker releases some data. You have to take into account how many opportunities you get also, and more but alot if implicit. I would say that a PF too low is bad, because when conditions change you will take long to notice with certainty and you will also lose way faster! If you had a PF of 1.1 you spent 5 years to grow, and that can be lost very fast AND it takes you longer to realize it is not working anyway. A high PF has a high margin for error, profits grow fast enough so drawdowns don't eliminate years of progress, and going from 2.5 to 0.75 over a period kinda is extreme. I think typically for operations that target 1 to 5 daily ATR, (days to weeks holding period), and you get more than something like 1 single bet a year, good profit factors are in the 1.5-2.5 range. Lower than this gets a little dangerous, more than this is the holy grail. A 25% winrate 5R system has a PF of 1.67. 4- Max Drawdown & risk per operation & max risk Here you use a binomial probability calculator. Plenty on the internet. Winrate 25%, Reward/Risk 5, PF 1.67 ==> After 60 bets, on average you should get 15 wins 45 losses. The odds of getting more than 15 wins (P: 16 or more out of 60) are 43%. The odds of getting less than 5 wins (55 or more losses) are 0,0956%. 1/1000. 10k account. Flat $100 risk per bet. 55 loss 5 wins = $5500 in loss, $2500 in wins, down $3000. 60 loss 0 wins = $6000 in loss, $ZERO in wins, down $6000 (rekt.) So every 1000 trades you should expect something like this right? Even with a very decently profitable strategy it will happen. You have to decide at what point you consider the odds of it just being bad luck to be too high, and you just want to drop it. Smaller drawdowns are going to happen absolutely all the time. If you are risking 1% every time and adjusting, 55L 5W would be a 27% rekt, and 60L would be a 46% rekt. The odds of losing 18 or more out of 20 are greater than 9% (9/100). Will happen ALL THE TIME. With 1% risk, drawdown of 8 to 18%. Expect it very often. Some clients use funds to diversify, to get returns with low risk. Some expect less risk and volatility than the stock market, but expect better returns. Cute. 5- Expected returns after 100 bets Say you got a system like the one I used in my example (that you backtested + used over a great number, or just used over a greater number of operations). Winrate 25%, Reward/Risk 5, PF 1.67 If you do not care about eating 20% punches in the face, and risk 1% per trade, on AVERAGE, after 100 gambles, then your results will be as such: 75 Losses, 25 wins (0.99^75)*(1.05^25) = 1.6. Up 60%. If you risk 1% of your 20 years life saving, you would get 20% drawdowns on a regular basis, meaning you worked for free 4 years. You can play around with calculators and notepad to estimate how big drawdowns you'll get, how often etc. With a 2% risk: (0.98^75)*(1.1^25) = 2.38. Up 138%. And regular drawdowns not of 8-18% but 23.3%-33.3%. And once in a while drawdowns of 60% to 70%. And a few times in a lifetime of 80% to .... What is the max drawdown before divorce + jump off a cliff? 6- Expected returns after 1 year And here we are... Traders should have a vague idea to start with but mostly look at all of this after running a strategy correctly and with some profits, over a "significant" amount of time, kek can't give a number. First of all what is the amplitude of moves you manage to catch? So the first limit is obviously the number of waves / moves. No matter what sytem you have you will not be able to join more waves than they are waves in the first place! And then... how many you can catch, is much, MUCH, lower than how many there are. Duh! Anyone with half a brain should be able to understand all of this at some point... Someone that manages to be profitable and doesn't blow up should make 5 to 40% I guess. That's that. It's exponentially harder, but also exponentially more profitable. I think I should build a new income stream writting books...
Education
by MrRenev
10
How can 90% fail? Delusional and lacking a pair.You might have heard stories of people that were looking for really bad traders so they could do the exact opposite. There was some guy that had a bot that would look at twitter bets and come up with a rr and wr, he was trying to sell that to a quant fund a few years ago. There sometimes are some people crying about really awful signal providers, something like .2 RR and 60% winrate. I just do not understand, they're pretty dense. I hear something like this my first reaction is to run to this guy and "SHUT UP AND TAKE MY MONEY". You're looking at a 5 RR and 40% winrate! Just take my money man. Imagine you could find the worse trader in the world, world's biggest twat. You just found the holy grail. Just fingers crossed he doesn't improve. I keep coming across this story... A few years ago (Data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015) a broker looked at 43 million trades. What they found really makes you wonder... On all 15 pairs, their noobs have over 50% winrate, with the lowest AUDJPY with barely over 50% and the highest EURAUD with a little over 60% winrate (euro pairs had 61% on average). And you guessed it, all of their losers are significantly bigger than their winners. Eyeballing it I'd say they are all between 50% and 100% bigger. Their average wins and losses are all something like half a daily ATR, so OF COURSE, the majority of these **** HAD to be daytraders. Go figure. For example, on the gbpusd, their winrate was 59%, they made an average 43 pip profit on each winner and lost 83 pips on losing trades. So a rr of 0,518. You see where this is going :D Let's flip it! Say that including spread = they lose 45 and make 81. RR = 1,8. And winrate is 41%. The breakeven point is (as long as the risk is low enough...) 35.7% winrate. The average day trading loser, well not loser, the average period, is 15% above breakeven. This is not even the average for losers, it is counting winners. So they are doing even worse/better. If they weren't such **** and went for bigger timeframes, with everything else kept same (they probably follow some dumb mecanical strategy they found from an internet troll), as so the stats are the same but spreads are insignificant; Then we would be looking, flipped, at a RR of 84/42 = 2. With 41% WR. 41/33.33 = 23% better. Quite an edge! They wouldn't even need to make much of an effort. They already have a big edge. Just flipping what they do, no hard research required, no sweat. EASY. Crazy. No to say bigger winners than losers is the only way to go, but in this case... clearly they could be very profitable just by doing the exact opposite of what they usually do... Why aren't all these losers becoming winners? I'll tell you why I think it's not happening, other than because they are stupid of course. 1- They are greedy and want to grow fast from day 1, so they blow up and never are in long enough to get any feedback or learn anything. 2- They are lazy and so don't look back on their trades. They just can't be bothered holding a journal, backtesting strategies, nothing. 3- They care what other clowns on twitter and crypto forums think, and need to grow a pair. So you see, it's pretty much IMPOSSIBLE not to be profitable if you really want to. IMPOSSIBLE. If you are at breakeven and think "I am almost there" I am sorry but I have bad news for you... It's easier to go from consistently losing trader (if you are able to do what it takes), than breakeven where there is no edge (unless you just practice self sabotage). I've heard of absolute clowns, that were surprised when someone threw their own numbers back at them showing that they were losing more than winning. If I was training someone at a firm or whatever I'd get fired because when I'd see someone that is not even aware he lost money in the past 6 months I'd just slap the ****. I am actually surprised how big the edge is... Pleasantly surprised, especially by the fact that anyone could make it but they are too lazy and too weak. Also, it is common to hear that in prop firms, every one gets the same equipement and training and learn the exact same strategies when they start and still 5-10% make it and the rest fails. Strategies can stop working, and it is worrying, but what makes a difference is YOU, as a person. Your edge is YOU, not your strategy or screens. That's an investment for life. As long as you get good, and can adapt, you will almost certainly always be able to extract money from markets.
Education
by MrRenev
4
ED, Edward Lifescences Corp. - Trailing Stop, RR, %ProfitabilityNYSE:EW Does the technical analysis work? Look at this! The important thing is to let the profits run and quickly cut the losses when the trend turns against you. How would your account behave after 100 trades if 6/10 make a loss and 4/10 make a profit? The answer in the Risk Reward is how much you earn when the trade makes a profit, and that's where the difference is made, i.e. compensating for all losses and creating profits on the long run. In addition to this, you must also decide on risk management so that your maximum exposure is appropriate for your risk profile, and does not result in heavy drawdowns to suffer and possibly irrecoverable.
NYSE:EWLong
by SwissTradingSchool
1
So what is the secret? Part 2. Going from begginer to pro.Hello, so first of all I mentionned in this idea what I think are the most important rules to keep in mind, and a guideline on how to build a system / a career: In this idea I would like to show what I think is the end goal, and how I would advice someone getting there. I saw a nice chart on the internet "How traders think versus How trading actually works", I modified it a bit, this is my view on the subject: I would not know how to explain to a complete beginner, but I think I understand the beginners that already read a bit about all this. Let me explain what is in this pie: About the watching the markets... some... people... still deposit money to cryptopia. Exchange went bankrupt. "It's just FUD", "don't look at the news they might convince you not to H0DL". Crypto community is the perfect example of what not to do, just unbelievable. Complete bunch of idiots. People that deposit money to a broker/exhange that went down have nothing to do in this business, stick to watching tv. If I had to guide someone I think going throught these steps would be what I would choose: 0- If they are eager to buy and sell with real money, go on a small account and sizes as small as possible. If they are already not able to control themselves, no point even trying. Cannot advance they have to be able to control themselves first. 1- Start just reading, watching videos. There is alot of nonsense, trolling, and just dumb ignorant people that give their opinion. So do not take anything for granted and absorb it all. There are some warning signs. Kid that went huge leverage and made 10,000% returns at once and starts calling himself the legend, the master of charts... Most people can tell this is dumb, right? I am not sure to be honest. Well at least 1/3 can I imagine. If you can't, go to step -1 and build your understanding of the world, common sense, some mathematics too especially probabilities. 2- I would make a feedback on what the person knows, I do this myself all the time. Re-learn everything make sure the foundations are solid and that it is all natural don't need to overthink it. But with experience it will really become natural. Decide what you like more (this will change with time) and start going in that direction. Also check if what you like (catching the falling knife bottom right before the trend reverses and riding it to the top) is possible (no) or just silly (yes). 2- Write a plan or a set of rules. How do you want to do this? Any system can do. Have a system that tells you what to look for and then detail it a bit. Say the rules are 1- Define the trend 2- Find out what is driving it and where it could end 3- Risk factors 4- Should I hop on & when? 5- How to set stop loss 6- Exit For each number from 1 to 6 you write how you do this. Does not have to be perfect. 3- I would suggest starting with a risk reward ratio not too high I just do not think it is a good idea to have a reward much greater than risk at this point. Try being right about the trend as much as possible, avoiding the really bad days, not to gamble, not to chase losers, understanding more how markets move. Stick to 1 or 2 (2 may be preferable to not get bad habits) markets. Maybe Bitcoin (and some alts) since it is very popular and also very educational, as well as gold, or indices if you prefer. Indices good. I think this is what I learned the first. Story time I remember (I think) the first chart I analysed was Bitcoin in 2014. It had no support till 100 to 250$ yikes. I was already a bear before I was a trader back in 2014. First markets I learned about and watched were the stock markets. Every one was always super serious about how many points were up or down and afraid of a big crisis, even when I was 8 or so I was thinking "oh calm down dude". 4- Time for a break. Might as well do that after a lose spree. 5- Review past trades. What was good? What went wrong? What happened that day? Why? Why did the price go up? Down? Following people on various sites helps for this rather than just being isolated, well I think it does, but careful there are plenty of idiots let's call them that, that just attribute price action to the dumbest things. When you start breathing talking finance, it becomes easier. At that point you may be 1 year in, you should start to get a feel of the markets and understand better how they move. Focus on working on your strong points weak points average points :p 6- You should have refined your trading, and try having a profitable or at least break even strategy over a great enough number of trade that you know it is probably not just a lucky - on unlucky - run. Being non delusional is important. If you kept winning in a raging bull market, be aware of that. You are on your own and there is no one to tell you that. Well there is MrRenev but people do not listen. I think now you should focus on avoiding really risky trades such as have the potential for massive slippage or just ahead of some important report, weed out the bad ones. Also, you get better at holding when you should hold, and exiting when you should exit. 7- Now is the time to increase that risk to reward ratio. The best, the really top trades, they all have high risk to reward ratios. It is broken. It is like hacking. You can get very profitable this way. There are some opportunities where the odds are high even thought the risk to reward is big. One of the reason why I do not recommend this earlier is you lose 5 in a row you do not know if you made a mistake or it is all normal. Better have plenty of winners and try looking "ok so did I enter too early or not how far did they go" etc. You just have more to work with. I don't think going high reward/risk from the start is really a good idea. Once you are good at picking winners, and weeding out the really bad ones, you can focus on raising your RR while trying to maintain a decent winrate. If you manage to get a high RR, above 5, then maybe you can focus on increasing winrate a bit again. It might be time to start looking at a new market too, if you are comfortable with the 1/2 you started with. 8- Permanent learning improving, adjusting to new conditions. At that point you know what to do and it gets more specific. * You can use an indicator if you like it, but chill out with the indicators my gawd. Most of them don't even tell anything you cannot see on the chart for yourself when you have some screen time.
TVC:USOILEducation
by MrRenev
2
Money Management 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Money Management 101 Are you receiving a win-rate of more then 60% and still loosing money?? Money Management may be an area that you need to focus on. It is an essential element in becoming a professional trader. Listed below are 4 Simple Steps To Evaluate Your Financial Health; 1. Position Sizing A portfolio of $... and I decide to only risk 2% on a trading strategy 2. Capital - How much? A portfolio of $.... 3. Loss - How much? I must be right more then 50% of the time, but win more money on winning trades versus losing trades. I will use stops and limits to enforce a risk/reward ratio of 1:2 or higher 4. Profits - What? A profit/loss ratio refers to the size of the average profit compares to the size of the average loss per trade. For example, if your expected profit is $1500 and your expected loss is $500, the P/L ratio is 3:1 Please let me know if you have any questions :) Happy Trading "The simpler it is, the better i like it" Peter Lynch
TVC:GOLDEducation
by SMPTrader
What a 40% win rate gets you, all profit is in the R:RI mentioned on another site that I'm in a usdcad weekly short (as illustrated) but what people don't know is that I'm a swing trader that uses something similar to scalping risk management techniques. It's really hard to explain but very simple to do. I could not teach the technique to anyone because it's the way I learned to interact with the market over many years. It's not like just trying to catch runners. Beginners may think 40% winR is low but for me 20% would be low, 55% would be very high. By looking at the figures on the chart you can see my reward is 3.55, but that's the low point across the board. Out of all the winning pairs for the month gbpjpy is highest at 4.4 followed by nzdusd at 4.21 and the lowest being cadjpy at 2.37. All the others are 0, except eurusd, which is slightly below 0 but definitely not 1. All the profit happens in the R:R, very simple, but hard to execute without practice. Not forex, but in other markets I can do 85 to 100% daily win rate but on a trade by trade basis contained within a day, it's still about 40%. In forex I can't do 85 to 100% daily win rate, no way, but monthly, sure thing. I know people that hit that number daily but they are going for about 25 pips per day, not looking for the HTF swing trades. In May I made 62.82% but so far this month I'm at 6.82%. I like to hit 10% per month just for my own peace of mind.
by marketdiverfx