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About 8 days ago I started trading a system that I put together. I started with about $900.00 I have built my account up to about $1,900.00 net including commissions. I have been only trading 1 contract on the Russell. I know that it is still early but I am pleased with my results, but I am not pleased with the percent of winning trades. My stats show me to have a 39.77% profitable rate. To me this is really low. Although my profit and loss is descent, I would really like to increase my percent profitable rate. What I am asking is how does one go about sharpening the knife so to speak with my system. What can I do too either filter out trades I should not be taking or adding another indicator. My system is simple and is based on a couple of standard indicators for my set up and then a standard indicator for a trigger. Kind of new to the improvement on a system. My system is nothing fancy but it works for me. Any help would be appreciated as to what process I can take to improve my percent profitable rate. I have attached a screen shot of my Ninja account performance sheet so that one can see the nuts and bolts of the end factor. By the way this is real money not sim trading.
part 1: http://screencast.com/t/ErEhZuTWhq
part 2: http://screencast.com/t/Bf77Xg4nJl
40% win rate is fine....mine has been around 36-37% now for months...and I am nicely profitable with it...i would like a better win rate but I realize its not the rate, its how big I win vs my losers.....thats really the only criteria and perhaps the real holy grail.....
Be happy with 40% and make sure you lose less than you win in terms of absolute dollars.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I am risking 7 ticks per trade and I go to break even at +5 then I use my fib extensions for my targets
and trail from there.
Is that what you mean by risk based on reward. Maybe the question I am asking is how do I determine risk vs reward as the definition that you would consider.
Oh ok great Panda. I was really just wondering because I saw that on my stat sheet and was a little surprised. Great to hear that this could be in line with other traders like yourself. What concerns me is that I hear other traders say that they are 80 and 90 percent win rates. But I guess like you say it really amounts to what your bottom line is.
People who say they have 80-90% win rates are either scalping or selling something or both. I mean, who wants to buy something that is advertised as winning only 40% of the time. That sounds stupid. Hence the high win rates.
I believe some highly disciplined scalpers could have those kind of win rates but its beyond my personal discipline level and I'm not sure it's sustainable over time.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Anyways, I have met maybe 2 traders that consistently achieve greater than 70% win percentage over time. I sometimes catch a lucky streak and do 80%+ wins, but always 'revert' back to the 50-60% zone. For planning purposes, I just assume going in I will end up with a 50% win rate.
I would just like to add, based on my experience, avoiding large losing trades is as important as anything a trader can do. I have found in my trading I get a lot of small wins and small losses, and a few larger wins, and (hopefully) no large losses. At least keeping a small loss from becoming a large loss is one thing we can control.