With a random entry system, you need your winners to be bigger than your losers. You should expect to lose 50% of the time.
So a win rate of 50% is expected and yet at entry time there is no reason for your winners to be larger than your losers because your entry is random.
Anyway - say your starting point is a 50% win rate system. Which direction would you prefer to take that in and why?
1 - Improve the win rate and possibly accept a lower R:R
2 - Improve the R:R and possibly accept a lower win rate
3 - Look to both improve the R:R AND win rate
Obviously number 3 sounds like the best option but the "why" should really explain why you feel it's feasible.
As an aside, it might also be worth considering how your choice would impact the number of opportunities that would occur.
Just realised I never actually answered this.
None of them TBH.
If you want efficiency, a random or semi random entry is simply the wrong place to start.
So I would say 4 - go back to square 1.
One possible exception I can think of would be random entry at
session start with something like reverse at stop, so subsequent entries
are controlled by price.
Tight BE, stepped trails and widish target / time window / max loss to cancel,
or whatever else you prefer.
Either way, it will be very hard if not impossible to improve strike and av. RR together.
One or the other is the best you can hope for taking this approach.
Thats assuming you wanted to stay in the systematic domain.
If not, level reactions and so on, are more efficient than random entry.
Thats the whole point, inefficiency goes with the turf with a systematic
approach, its largely unavoidable due to the fact its largely impossible
for code to interpret level reactions, tape and volume, at the retail end at least.
The bonus is the ability to more rigorously test it, which of course is absolutely
no use if you can't accept the inefficiency that goes hand in hand with such
an approach.
That simple fact is the reason why most people attempting a systematic
approach fail.
They attempt to alleviate that inefficiency, more often than not by short
term curve fitting, end result isn't robust.
Discretionary trading is like fly fishing, you need to master it, not everyone
can or even wants to.
Done well, it is a more efficient and targeted approach, although more labour intensive.
A systematic approach on the other hand is like a trawler dragnet.
It is impossible to be efficient.
Thats the real choice.
Strike rate and average RR are a by product of that choice.
You can't have both.
That choice is largely out of your hands - its based on availability,
time and the willingness / ability to actively screen watch or not.
