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 drops to daily lows near 1.1630
EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.
GBP/USD trims gains, recedes toward 1.3320
GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.
Japanese Yen refreshes three-week high vs USD; seems poised to appreciate further
The Japanese Yen retains bullish bias as BoJ rate hike bets offset dismal Household Spending data. Dovish Fed expectations fail to assist the USD in attracting buyers and keep a lid on the USD/JPY pair. Traders keenly await the US PCE Price Index for Fed rate-cut cues and a fresh directional impetus.
Editors’ Picks
EUR/USD drops to daily lows near 1.1630
EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.
GBP/USD trims gains, recedes toward 1.3320
GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.
Gold makes a U-turn, back to $4,200
Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.
Crypto Today: Bitcoin, Ethereum, XRP pare gains despite increasing hopes of upcoming Fed rate cut
Bitcoin is steadying above $91,000 at the time of writing on Friday. Ethereum remains above $3,100, reflecting positive sentiment ahead of the Federal Reserve's (Fed) monetary policy meeting on December 10.
Week ahead – Rate cut or market shock? The Fed decides
Fed rate cut widely expected; dot plot and overall meeting rhetoric also matter. Risk appetite is supported by Fed rate cut expectations; cryptos show signs of life. RBA, BoC and SNB also meet; chances of surprises are relatively low.
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