wackypete2
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Since they perform equally well, I'd opt for the 70% method. It fits my tolerance level better, less aggravation!!
tar
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Same here , nearly everyone is like that , but win rate alone shouldnt be a measurement of success because it isnt .
timsk
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For me, psychologically, the 70% method will be much easier to handle. The drawdowns on the 30% method will be bigger and, probably, last longer - leaving that nagging feeling that the once profitable method has turned a corner and isn't profitable any more. If the 70% method drops off to, say 50%, then I would put a stop to live trading while I investigate the reasons for the change in performance.
Tim.
Tim.
timsk
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tar,
The nature of barjon's opening premise indicates to me (although I accept I may have misinterpreted his intentions) that he wants us to think in terms of generalizations - broad brushstroke stuff - all other things being equal etc. - and not get bogged down in nitty-gritty detail. Hence the sparse nature of his OP. That being the case, it's reasonable to state (as I did in my previous post) that drawdowns tend to be larger with lower success ratios and smaller with higher success ratios. For traders executing thoroughly researched and tested trading plans, there's nothing very controversial about that. Of course, there will always be exceptions. You have made a point on other threads of highlighting Myfxbook traders who have a 90%+ win rate and then blow up quite spectacularly. IMO, that's the drawback with Myfxbook and sites like it. Namely, prior to the account blow up, it gives the false impression to those who know no better that the trader concerned is God's gift to the markets.
If executed properly, a thoroughly researched and tested trading plan with a higher win rate (e.g 70% in barjon's example) will, by and large, broadly speaking, in most cases etc. etc., enjoy lower drawdowns than a methodology that has a win rate of 30%. Needless to say, this does not apply to the charlatans, ne'er-do-wells, scammers and braggarts that you are so adept at highlighting on sites like Myfxbook.
Tim.
barjon
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It's a risk management question "good traders see themselves first and foremost as risk managers" is the word from a professional commodity trader.
He says that the vast majority of professionals would opt for 30% because there is precious little margin for error in trying to maintain 70%. The 30% option has by far the better risk management profile.
He says that the vast majority of professionals would opt for 30% because there is precious little margin for error in trying to maintain 70%. The 30% option has by far the better risk management profile.
Thanks Tim. Of course! I must be getting old. I completely misunderstood Barjon.
I'm going to delete my post. It's irrelevant.
I don't think it matters. Both win rates will need to accommodate risk management that aligns with the expected end game. If you trade with 30 percent win rate then you need to hit home runs that payoff the losses (larger moves). If you trade with 70 percent then you tend to take moves more common (say 30 pips instead of 300). If you manage positions correctly then you can still hit home runs in this model and you can do that by either trailing a stop correctly or closing partial on targets and allowing the remainder to run should the opportunity arise. My preference is going to be the later but I guess it's a personal decision
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tar
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Exactly my point , usually the higher the win rate the higher the drawdown but it takes time to hit the max dd = delaying it .
tar
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Yes, I meant to draw attention to your earlier post, but forgot. I think he means more generally also, not just max drawdown.
Yes ofcourse not just max dd .
