30% - 70%

[Fugazsy]

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.

I agree, I would not mind having a 70% and I always work towards it but in the mean time I need to work on something is in reach of my ability, mind set and peace of it is essential in my trading and leaving spaces to manoeuvre in errors helps me archive that.

 

[tar]

This shows you that its not about the win rate , and if its not about the win rate then its not about being right , so maybe its about time to stop trying to be right and to stop predicting the future - which is impossible - and instead start viewing trading from a different angle and work at another dimension .

 

[tomorton]

......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.

I don't think we're seeing the whole picture. Its the definition of risk that's key here.

With the same account size and the same % of capital risked per trade, a 30% win rate is going to demand far more trades per month / per year etc. for the same return in real terms, assuming that amount won per trade is only approximately equal also. you can't decide to win more from the market just because you want to - surely you use whichever method allows you the greater return per trade. But this means that an error or failure on each of the 30% win rate trades will be less damaging to the account size than any one stopped out trade of the 70% win rate trades. And surely that's the reason the risk is lower with a 30% win rate. Its not the risk of loss from the account when following the set methodology, both are equally risk rated, its the risk of additional damage when deviating from the methodology or "norm".

Obviously both make the same amount of money per year - when every trade is perfectly managed. But the 30% win rate approach allows for a greater degree of poor trade management than the 70% win rate approach. And that's why its safer. Have I got it?

 

[Fugazsy]

I agree market cannot be predicted, skills and technique can skew the edge in our favour by not that much, lets say 60 %, then how we deal with the trade can also make a bit of a difference, market does not have to do anything.......we need to be enough nimble to jiggle between the various conditions the market will present itself.

 

[NVP]

Two methods perform equally well. One is profitable 30% of the time, the other 70% of the time. Given the choice, which of them would you want to use?

neither ...........I prefer a higher average win rate dude ...

 

[piphoe]

I agree market cannot be predicted, skills and technique can skew the edge in our favour by not that much, lets say 60 %, then how we deal with the trade can also make a bit of a difference, market does not have to do anything.......we need to be enough nimble to jiggle between the various conditions the market will present itself.

a 60% edge is predicting the market direction....60% of the time

 

[NVP]

neither ...........I prefer a higher average win rate dude ...

been kind to me today .......but most good traders here will be hitting over the 70% I am sure

N:smart:

http://www.trade2win.com/boards/forex/214462-fxcorrelator-forex-trading-view-24.html#post2726750

 

[NVP]

This shows you that its not about the win rate , and if its not about the win rate then its not about being right , so maybe its about time to stop trying to be right and to stop predicting the future - which is impossible - and instead start viewing trading from a different angle and work at another dimension .

very good point T ........good traders think outside the box .........if everyone uses the same edge it does get a little blunt

 

[piphoe]

many fortunes made in casino's with a paltry 1% edge (51%) over the house.

the key is working it over time.

a 10% edge is HUGE should make you rich real quick.

having said that i believe most traders overestimate their edge. full stop.

 

[new_trader]

Veteran traders still think it's all about taking stabs in the dark

This shows you that its not about the win rate , and if its not about the win rate then its not about being right , so maybe its about time to stop trying to be right and to stop predicting the future - which is impossible - and instead start viewing trading from a different angle and work at another dimension .

If this isn’t a joke then it’s absolute nonsense. This is why I don’t waste much time in this forum anymore.

 

[tar]

If this isn’t a joke then it’s absolute nonsense. This is why I don’t waste much time in this forum anymore.

Trying to predict the future is gambling . Trading should be looked at differently , you dont have to predict the future to make money , think ig index do they predict the future no do they make money yes alot of it , think earning dividends for example ... etc .

 

[new_trader]

Trying to predict the future is gambling . Trading should be looked at differently , you dont have to predict the future to make money , think ig index do they predict the future no do they make money yes alot of it , think earning dividends for example ... etc .

'Predicting the future' is a straw man argument. Your words were:
"This shows you that its not about the win rate , and if its not about the win rate then its not about being right , so maybe its about time to stop trying to be right and to stop predicting the future "

Making the correct analysis and then investing/trading accordingly invariably results in making money. This has zero to do with predicting the future. That would be as absurd as saying that an engineer who designs a bridge that when built performs as expected correctly predicted the future.

 

[tar]

'Predicting the future' is a straw man argument. Your words were:
"This shows you that its not about the win rate , and if its not about the win rate then its not about being right , so maybe its about time to stop trying to be right and to stop predicting the future "

Making the correct analysis and then investing/trading accordingly invariably results in making money. This has zero to do with predicting the future. That would be as absurd as saying that an engineer who designs a bridge that when built performs as expected correctly predicted the future.

Well you are not designing a bridge .

 

[hhiusa]

That is an irrelevant conclusion fallacy tar. At least there is one other person here who understands logic, namely new_trader. This goes out to Pat. I am not the only one who expects people to be logical and points out their fallacies.

 

[tar]

In layman terms you dont have to be right about the direction to make money , maybe you should concentrate on other aspects of trading instead of the direction of the market itself . You can have 90% win rate and still lose a ton of money and you can have 10% win rate and manage to make good money .


GL

 

[hhiusa]

When you place a long trade you are positing about the direction of the market, mainly that it will go up. You do not place a long trade when you think the market is going to go down. You have to be right about the direction to make money. Even if you place a bet on both sides you have to put more money on the correct side to net a gain.

 

[tar]

If Warren Buffett gave the "expected" direction for 10 stocks with the exact entry points to a t2w member and to a pro , i bet you the pro will make much more money than the t2w member and the t2w member will most likely end up losing money ! They are the same entry points for the same stocks called by the greatest investor but the results will vary considerably depending on the driver who is behind the wheel .

 

[forker]

That depends on which t2w member is on the other side

 

[Fugazsy]

if you can nail 60% of your trades and have the ability to be nimble enough once in the trade you can make serious money especially if you take at least one trade per day.

Of course there will be many making over 70% but in my humble opinion their are mostly amateurs believing donkeys will fly or charlatans.

 

[Mr Sept]

if you can nail 60% of your trades and have the ability to be nimble enough once in the trade you can make serious money especially if you take at least one trade per day.

Of course there will be many making over 70% but in my humble opinion their are mostly amateurs believing donkeys will fly or charlatans.

Agreed. .......with a good ratio.