30% - 70%

[forker]

None of you can come forward and explain exactly why a higher win rate has more risk. You keep stating hot air on the subject and some even go so far as to assume from thin air. I think this thread is a lost cause.

 

[tar]

How can you generalise that a 70 percent win rate would be mostly in the red?

The positions would be mostly held in the red not the strategy itself is in the red . Thats usually the case because traders will wait for the price to come back in the black and thus increasing win rate .

 

[mb325]

The positions would be mostly held in the red not the strategy itself is in the red . Thats usually the case because traders will wait for price to come back in the black and thus icreasing win rate .

You assume that positions are 'held' for a sufficient amount of time for all this to happen - there was nothing in Barjon's original post which suggested a timeframe for each method.

 

[tar]

but it seems with you I need to be vibrantly expressive to leave little room for those assumptions you avidly make.

Please do spill the beans sir on your forecast for the next 10 years.

You are losing it . I am not the one who is making these "assumptions" the pros did .

 

[forker]

The positions would be mostly held in the red not the strategy itself is in the red . Thats usually the case because traders will wait for price to come back in the black and thus increasing win rate .

So you think you can cookie cut every trader into that way of trading because he\she happens to achieve a 70 percent win rate. Is this a joke? Or do you really think like that?

 

[forker]

You are losing it . I am not the one who is making these "assumptions" the pros did .

I'm not the one assuming here. I may be losing it but you have lost it completely.

 

[barjon]

None of you can come forward and explain exactly why a higher win rate has more risk. You keep stating hot air on the subject and some even go so far as to assume from thin air. I think this thread is a lost cause.

The profitability of the two approaches is what has happened in the past. To maintain 70% which assumes most trades to be winners is going to be more difficult than the 30% which assumes most trades are going to be losers. Every approach is going to have its bad times and, to repeat, there is precious little margin for error in the 70% option.

 

[piphoe]

...both methods perform identically. full stop.

...the 70% method captures more stops is all that can be assumed from premise.

...cannot assume a greater drawdown with 30% method with info given.

all that really matter is performance. full stop.

 

[barjon]

......or looked at another way. You can afford to be wrong 70% of the time with the 30% approach, but you can only afford to be wrong 30% of the time with the 70% approach.

 

[barjon]

...both methods perform identically. full stop.

...the 70% method captures more stops is all that can be assumed from premise.

...cannot assume a greater drawdown with 30% method with info given.

all that really matter is performance. full stop.

Yes, they have performed identically, but we're talking about the relative risks of that maintains in the future

 

[tar]

......or looked at another way. You can afford to be wrong 70% of the time with the 30% approach, but you can only afford to be wrong 30% of the time with the 70% approach.

Great way to put it in layman terms .

 

[tar]

So you think you can cookie cut every trader into that way of trading because he\she happens to achieve a 70 percent win rate.

No , read again .

 

[forker]

......or looked at another way. You can afford to be wrong 70% of the time with the 30% approach, but you can only afford to be wrong 30% of the time with the 70% approach.

A trader doesn't need to be right 70 percent of the time to make money. You know this to be true as it's the premise of your opinion. Nobody maintains a consistent win rate - it fluctuates. In order to have a consistent win rate you would need to achieve the impossible. You couldn't for example consistently achieve a 1 percent win rate. Regardless of that point; if a trader has a win rate of 70 over a period, doesn't mean the trader requires it to be profitable. Your logic only holds true if the trader isn't getting enough profit overall and therefore needs enough winners to pay for losers

 

[piphoe]

Yes, they have performed identically, but we're talking about the relative risks of that maintains in the future

...ok, well, hypothetically more difficult to tell when the 30% method stops working.

...and while it does stop working bigger drawdown from the accumulated larger stops necessary trading a 3/10 ratio.

 

[forker]

No , read again .

Naaa, bored of this thread already.

 

[piphoe]

...let's take this to it's logical extreme...

once per day; or once per yr?

each perform identically.

what can be assumed from the above premises?

which do you prefer, and why?

 

[barjon]

A trader doesn't need to be right 70 percent of the time to make money. You know this to be true as it's the premise of your opinion. Nobody maintains a consistent win rate - it fluctuates. In order to have a consistent win rate you would need to achieve the impossible. You couldn't for example consistently achieve a 1 percent win rate. Regardless of that point; if a trader has a win rate of 70 over a period, doesn't mean the trader requires it to be profitable. Your logic only holds true if the trader isn't getting enough profit overall and therefore needs enough winners to pay for losers

Of course they fluctuate, that's the point. I didn't say the trader necessarily requires a 70% win rate to be profitable. And it's not my opinion - it's what one professional trader about the way he and the majority of other professionals think.

 

[forker]

Thank goodness for diversity

 

[Fugazsy]

......or looked at another way. You can afford to be wrong 70% of the time with the 30% approach, but you can only afford to be wrong 30% of the time with the 70% approach.

Yes. One have to have a vision/plan and work towards that, for me maintaining 70% will be uncomfortable psychologically, maybe with the 30% I need to hold trades longer than what I actually do or change my way completely.

 

[barjon]

Yes. One have to have a vision/plan and work towards that, for me maintaining 70% will be uncomfortable psychologically, maybe with the 30% I need to hold trades longer than what I actually do or change my way completely.

From what I see you trade ok ( I hope that doesn't sound patronising). This isn't about persuading anyone who is trading around 70% to ditch their approach and hunt for some 30% approach. What it is about, really, is highlighting the importance of risk management which fills the minds of professional to a far greater extent than amateurs.