Newbie trading system

[PhilC5871]

Hi All,

a relative newbie to FOREX, but I'm currently building my own trading system looking at various indicators, MA's, timeframes etc.. and then backtesting.

In terms of a succesful system, what would constitute a good return. I accept this is somewhat of a stupid question. But, - should I be looking at a winning trades %, or PIP gains ?

Is 70% winning trades good ?

Regards
Phil

 

[Niove]

The quick reply is that you should be looking at expected returns, which would be the product of your win ratio times your gain per trade. This should obviously be positive and high enough to cover commissions and slippage.

70% win rate on its own means nothing. How much are you making? if its below commissions and slippage its not good enough or will it ever be. How much are you risking to make it... there are numerous considerations to take into account.

Given two strategies with the same expected value I 'd go for the low win ratio, high gain per trade one. Not very popular as it hurts the eyes to see a lot of losing trades and only a few winners, but it could save your account should the odd big loser come along early on.