Another of the most important factors when developing or considering a trading system is the percentage of profitable trades, what we have called the Win Rate.
The lack of understanding of the Win Rate figure goes also further as many traders think that a higher percentage of profitable trades is better than a lower number - but it is not. It all depends on how it relates to the Average Profit per trade, the trade frequency and the duration of the trades.
The type of trading system you develop will usually imply a certain Win Rate. For example, very short term scalping methods may incur a high Win Rate but have a low Average Win Rate. Alternatively, breakout systems may reflect a lower percentage of winners but the Average Profit per trade is usually greater because of a better Win/Loss ratio.
The same happens when considering the time frames used: very short-term time frames may frustrate attempts to raise the Win Rate since a position should be right immediately after opening, while a position on a large time frame will usually wade through many whipsaws. before reaching the target.
On the other hand, intraday systems (traded on 4H time frames or less) are better shaped to control losses than long term position trading systems, because the incurred losses in a smaller time frame should be smaller (on average) than a position held a larger period of time. Read More
Do you want to learn more?
VIDEO: How to Increase Your Win Rate With One Weird Trick - Walter Peters
REPORT: Luck vs. Skill in Trading - Traders' Magazine
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Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD snaps the two-day winning streak above 1.2450, eyes on US GDP data
The GBP/USD pair snaps the two-day winning streak near 1.2460 amid the modest rebound of the US Dollar on Thursday during the early Asian session. The release of the US Gross Domestic Product for the first quarter will take center stage on the day.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.
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