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Thread: % of wins

  1. Default % of wins

    I would be interested in peoples % of picks that go up and make money. The Turtles evidently had 45%. I asked around other traders and they said about 45% and looking back at my motley selection , 45%. Makes you wonder if technical analysis does work. Less than half of our picks work, that doesn't seem to me a great result.
    Does chart reading work ? I was told the market is random as a defence so that would make TA impossible hey ?
    I would like to get my ratio up to 60% or is this impossible. !!!

  2. Default

    The longer your timeframe, the lower will be your % of wins. The % of wins also depends on your exits.

    Through automated backtesting I have some one-day systems with 73% wins, 7 day average systems with 58-61%, but when I put long term exits on them they can change to as low as 35%.

    Don't forget that there are 3 possibilities for each trade, up, down and sideways. 45% up is not so bad under this view.

    Ken

  3. #3
    alishajc4 Guest

    Default

    It's possible to come out ahead with a 45% win rate if one's average win size is sufficiently high, compared to one's average loss size.

    For example, if I make 4 wins averaging $400 each, and 6 losses of $200 each, then my net result is
    ( 4 x 400 � 6 x 200 ) = +$400, even though my win rate is only 4 trades in 10, or 40%.

    The average loss size is determined by the distance of the protective stop from the entry. If the stock price trends steeply upward, then the amount of the win could potentially be several times this value. That's how the turtles, and others, have made their millions.

    If one's analysis is purely technical (price & volume only), and price movements are random, as Burton Malkiel states in his best seller 'A Random Walk down Wall Street', then it is mathematically impossible to profit, and any gains are the result of lucky guesswork. My own trading experience tends to confirm this view.

    If the market is "trending", then there is a bias to price movement, i.e. it is not random. Under such circumstances, one can potentially profit by trading in the direction of the trend, cutting losses short, and letting profits run as long as possible (creating the situation described above, where the average win > average loss).

    If trends persist long enough for you, on average, to overcome costs, then you will profit, otherwise you will lose. Trading is both as simple, and as difficult, as that.

    There are contributors to this forum whose accounts apparently show consistent annual profit. Some of these have been kind enough to freely share their winning methods on this forum.

  4. #4
    addemaenendy Guest

    Default

    Ken, thanks for that. Yes I see what you mean, if you take out breakevens its sounding better.
    Thats what I hate about weekly charting systems. You usually have to first go through a period of drawdowns .Then if the whole market corrects your way down. I think I feel happier using daily chart system.
    so for 7 day period or more it is possible to get the ratio up-great

  5. #5
    Allansougs Guest

    Default

    Setting a tighter stoploss will decrease your win rate, as you will be stopped out more frequently, but your average loss size will be smaller.

    Conversely, you could probably achieve a 90% win rate by setting incredibly loose initial stops, and taking profits very quickly. However, it would only take one (relatively) big loss to erase all of the small profits.

    There is no easy way of increasing both potential win size, and potential win rate, simultaneously, as one is inversely dependent on the other. How easy life would be if one could have one's cake and eat it too!

 

 

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