Absolutely! The average winner versus average loser is vitally important and is a component of the expectancy calculation.

Bubba1 

Do not forget a VERY important variable and that is when trades are closed, then have the average winner be bigger than the average loser. They told me in the SP500 pit in Chicago to not eat like a bird and poop like an elephant.

Bubba1 

Do not forget a VERY important variable and that is when trades are closed, then have the average winner be bigger than the average loser. They told me in the SP500 pit in Chicago to not eat like a bird and poop like an elephant.

Again this is a meaningless statistic without win/loss ratio. @kevinkdog did a great video on trading stats a couple of weeks ago which included this great chart, which illustrates nicely the relationship between Risk Reward (which is also average win/average loss) and Win%. You can't talk about one of those without the other!.



Full link to the video. (Its the website not me making it so large!) Kevin does a great job talking about trade statistics using the 30 odd systems he trades as an example.

SMCJB 

Risk Reward is a meaningless statistic without win/loss ratio.

100% agree. It drives me nuts when "gurus" share a high win ratio, but never divulge their risk to reward or vice-versa. You need both.

FWIW, here's ChatGPT's response to the oft-cited day trading success stats (you get what you ask for!):

I was watching a video recently that had this disclaimer displayed


"78.2% of retail accounts lose money when trading with this provider"

SMCJB 

I was watching a video recently that had this disclaimer displayed "78.2% of retail accounts lose money when trading with this provider"

So they are saying there is hope? hahahahaha

Bubba1 

Do not forget a VERY important variable and that is when trades are closed, then have the average winner be bigger than the average loser. They told me in the SP500 pit in Chicago to not eat like a bird and poop like an elephant.

This particular metric of average winner vs average loser is overlooked by a lot of traders.

Linktind 

This particular metric of average winner vs average loser is overlooked by a lot of traders.

Repeating myself, I think the opposite. A lot of traders focus on it but its actually a meaningless statistic without win/loss ratio.

I picked this from a trading system I have for the NQ and highlighted some stats that I think are important.
One overlooked stat is the remove to neutral


HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NO INVOLVE FINACIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETLEY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

@CannonTrading I'm not familiar with "remove to neutral" and a google search doesn't return much. Could you explain?