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70% profitable....still losing money


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70% profitable....still losing money

  #1 (permalink)
 HealthWealthTrade 
San Diego
 
Experience: Advanced
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Hey all, i just had a day that was 70% win rate and i'm still losing money...does any one have any suggestions for bettering my trading sessions? Currently i'm only trading 1 contract at a time. Do i seriously need runners that badly? is that what everyone will suggest? to trade 2 contracts and use runners?

thanks.

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  #2 (permalink)
lightsun47
Toronto, Canada
 
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What are you targets and where are your stops?

Example: When you enter a trade, your profit target is 1 point, 8 ticks, etc. vs your stop loss set at 1 point, 8 ticks, etc.

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  #3 (permalink)
 
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 bobwest 
Western Florida
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HealthWealthTrade View Post
Hey all, i just had a day that was 70% win rate and i'm still losing money...does any one have any suggestions for bettering my trading sessions? Currently i'm only trading 1 contract at a time. Do i seriously need runners that badly? is that what everyone will suggest? to trade 2 contracts and use runners?

thanks.

Well, if you had a 70% win rate but still lost money, this simply means that you had a lot of small wins and fewer, but larger, losses. Which is why "win rate" is a relatively useless statistic by itself. You need to watch what your average profit/loss is, or any other statistic that figures in the size of the wins and losses, not just how many of each there were, such as expectancy.

With that said, I don't see how anyone can offer a suggestion with only what you have supplied about your trading. With more information, there might be more useful ideas.

In the absence of more information, I would suggest you look at how large you let your losses get before killing them, and whether you take your profits too soon. I think this is why @lightsun47 asked about your stops and targets: if you have a very small target but a larger stop, you are asking for the kind of trouble you got into.

As to runners or any other tactic, no one can say without knowing more about your trades. But the thing that is most likely to help is just killing those losses sooner and not killing the profits as soon.

You might open a trading journal here and post your charts and trades if you want more feedback.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #4 (permalink)
 
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 shodson 
OC, California, USA
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I just want to reiterate what @bobwest said, it's all about expectancy. I have a strategy that only wins 20% of the time, but it makes money because when it loses the losses are tiny, but the winners are much larger. Win rate is only part of the equation.

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  #5 (permalink)
 HealthWealthTrade 
San Diego
 
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shodson View Post
Win rate is only part of the equation.

Thanks for the help you guys.

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  #6 (permalink)
 
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 Massive l 
OR/USA
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You need to get your R to at least .7 to make 70% win worthwhile.
That should make your total wins$ close to 2x as big as your total losses$.
Your R is extremely low if you're not profiting with 70% win.
Test and see what happens when you increase your targets.
Might be at 60% win but 1R and a very solid strategy.

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  #7 (permalink)
 HealthWealthTrade 
San Diego
 
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My average winning trade is .71
My average losing trade is -1.73

Those are stats from the beginning....the 70% was from a single day.....and from the beginning of time its more like 60%.

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  #8 (permalink)
 
Massive l's Avatar
 Massive l 
OR/USA
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HealthWealthTrade View Post
My average winning trade is .71
My average losing trade is -1.73

Those are stats from the beginning....the 70% was from a single day.....and from the beginning of time its more like 60%.

So that's .41R. Guessing you need around 80% win to be successful with that R.

I just put up a .43R and 66% win = .83 profit factor for the week. (-$1700 total).

So yeah you won't win at 60, 66, 70, maybe close at 75% but you'd need to run a strat with 80% consistently to use that R.

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  #9 (permalink)
1BSD
Hamburg / Germany
 
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It's all about expectancy, not winning percentage as bobwest explained very well.

To be honest, there is one single thing that turned my trading around, and it most definitely wasn't a highly complex method...

After having wasted years doing what probably most everybody does in their pursuit of net profitable trading searching for a never losing holy grail to markets, looking at pretty much everything under the sun in the world of trading, trying to crack the secret behind markets...

I realized there is no secret, because there can't be a secret, as all markets are, is the sum of the activities of all participants with many different objectives, hedging, speculating, trend trading, mean reversion, etc etc.

Once I got that into my head and realized its just a numbers and probability game I went back to the very first thing I'd picked up, buying dips and selling rallies.

But even that didn't quite get me there yet.

What got me into the green was completely understanding that with a reward at least twice my risk I'd be net profitable with just above 33% winners.

It IS that simple.

People just start searching for complex explanations and methods when they haven't yet identified what the truly success relevant factors in any given endeavour are.

In trading its identifying a trend and doesn't matter much how you do that, wait for a pullback, and stick to at least 2:1 rr's.

And, most importantly develop the mental stamina to have the patience and discipline to do nothing else.

The rest is up to the magic of compounding.

Don't waste years of your life to seeking ever more convoluted methods with a million filters and a gazillion exceptions, and switching methods or time frames or markets etc just because you had a couple of inevitable losers that are an inherent cost of doing business as a trader.

In a nutshell what got me there was a simple method aligned with what markets do, move up, down or sideways, and fully and totally accept losses while being very grateful for the fact that all I need is winners being twice the size of my losers while staying above 33% winners to get my equity curve growing and keep it in that state.

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  #10 (permalink)
 
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 qsceszwasdx 
Taipei Taiwan
 
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Apparently, your Profit Factor is too low, Profit Factor is more important than win rate.

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