Win percentage

[It's Snake Pliskin]

What factor contibutes to the win percentage the most if at all?

 

[GreatPig]

Getting it right...

 

[MichaelD]

Time frame. (Shorter = higher, Longer = lower)

Inverse response for win:loss ratio.

 

[stevo]

As a veteran member I was hoping that you had the answer to this one

I prefer to consider the total dollars won versus dollars lost over a period (win/loss ratio). It's not that hard to have 60% winners and still lose money. The desire to have a high win % can mean that people take lots of small profits but hold onto some big losers.

Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.

stevo

 

[tech/a]

(1) Agree timeframe will be a determinent.
(2) So to will be tightness of stop.
(3) Initial capital can also be a factor as you may not be in the position to take as many potentially profitable trades.

I also agree with Stevo.
And Im sure you are aware (hence the questions) Win % combined with Profit % are important factors.There needs to be a balance and its different for each timeframe.

Stevo maybe able to shed some figures to add to mine.

But I have found.
Good short term single entity (Stocks or Futures) methods have around 60-80% win rates.Intra or a few days
Long terms have 30-40% win rates.Months and years
Medium term weeks and months.40-60% win rates.

 

[stevo]

Stats from my portfolio over the last 3.5 years up to the end of June 2006;
Percent winners = 57%
Profit Factor = 3.10 (Win$/losing $ realised trades only)
Average hold time = 21 weeks
Longest trade = 99 weeks.

I like to have a % winners number around 50%. I think that it is harder to trade a system that is too low, but it's not really an important number.

Basically there is a 50:50 chance of the next trade being a winner so I am not relying on any special knowledge to pick winners, rather the knowledge that the winning dollars will be, on average, 3 times greater than the losing dollars.

Stevo

 

[Bobby]

Basically there is a 50:50 chance of the next trade being a winner so I am not relying on any special knowledge to pick winners, rather the knowledge that the winning dollars will be, on average, 3 times greater than the losing dollars.

Thats roughly how I play the game also, but do agree with Tech that with shorter time frame trades its easier to do better then 50:50 .

Bob.

 

[It's Snake Pliskin]

As a veteran member I was hoping that you had the answer to this one

Well maybe I should be like you then.

I prefer to consider the total dollars won versus dollars lost over a period (win/loss ratio).

As you`ll see there is the other thread and you are not alone.

It's not that hard to have 60% winners and still lose money. The desire to have a high win % can mean that people take lots of small profits but hold onto some big losers.

Yes, people do this don`t they. People with pissweek convictions and weak minds.

Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.

I would say everybody has done it.

So I gather your answer is time.

 

[blueroo]

Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.

Even though this could be a common occurence, I don't consider it to be important. Hopefully, the proceeds from the stock sold would be put to good use on other winners.

What do the books say? Never look back!

Hooroo from Blueroo

 

[happytrader]

I agree with Techs shorter timeframe figures being the most profitable.

Also the shorter the time frame the less likely you are to suffer from attachment to possibilities and flights of fancy instead of the reality.

Ever heard of Stockholm Syndrome? This is where victims become attached to their perpetrators. Solution - POQ.

Cheers
Happytrader

 

[It's Snake Pliskin]

What factor contibutes to the win percentage the most if at all?

A determination to win - creating a negative effect if wins are consistently small.

It doesn`t have to be positive to be a valid point.

Overall the win percentage doesn`t mean much by itself.

 

[stevo]

Happytrader,
"I agree with Techs shorter timeframe figures being the most profitable."

Tech did not actually say that short term systems were more profitable - just that good short term systems typically had win rates greater than 60%.

I would say that on average longer term systems outperform short term systems - but then I haven't found the right short term system. Longer term systems are certainly easier to trade and have lower brokerage costs.

Stevo

 

[ducati916]

et al

Well the numbers disagree with all of you;

When linked to probability studies, the following was calculated;

Example;
An investor who can earn a return of 15% in excess of the Treasury rate, with 10% volatility. Calculated via standard deviations;

Probability of making Money
Scale...................................Probabilit y
1yr.........................................93%
1Quarter.................................77%
1month...................................67%
1day......................................54%
1hour.....................................51.3%
1min......................................50.7%

In the short-time frames, it is a 50/50 proposition, but stretched out to the longer time frames, the probabilities rise very high.


jog on
d998

 

[stevo]

Duc
I don't suppose that you have a link to the reference that you are quoting from.

stevo

 

[tech/a]

Hmm Duc youve acheived 2.26% nett profit over 8 mths in your example?

Whats wrong?

Id like to see the probability figures as well.

 

[nizar]

(3) Initial capital can also be a factor as you may not be in the position to take as many potentially profitable trades.

tech/a and others,

just a question,

what happens if for example u have $x, and each position size is $x/10, so u can have upto 10 positions open at any one time. If you are fully invested, is it true that u will not exit your position until your (trailing) stop is hit? coz this means that u could be holding onto slow movers and missing out on rockets potentially...

if this is the case, what happens if while no stops are hit, your stocks that u have positions in are moving very slowly (albeit upwards) and ur system picks up a stock which is really firing, but your cash reserves have dried, so u cant take a position, do u decide to close one??

do u know what i mean, and what do u do in this situation?

obviously the one u miss out on could be a real winner and what determines the (degree of) profitability of your portfolio yet u have missed out because u are "fully invested"

also - wat im trying to get at, is that is there any other reason u would exit a stock apart from it hitting your stop?

Thanks

 

[clowboy]

Nizar,

the simpliest way to fix that problem is to tighten your stops.

Of course that could also mean you miss out on a stock that runs if it has a small corection but it will certainly reduce the ocasions that all your funds are tied up.

At the end of the day though if all your funds are in trade and not getting stoped out (so long as your system is profitable) then you are running at maxium effeciency and so you should not really be worried about the ones that got away. Ideally wouldn't you like to have all funds in trade making (or losing) money all the time than only have half your funds in trade making (or losing) money all the time?

 

[nioka]

What factor contibutes to the win percentage the most if at all?

If the company is researched before the investment is made the chance of failure is reduced considerably.

If you take more risk you will havemore losses %wise then luck plays a part.

Investors have a better % than traders.

 

[stevo]

Nizar

If this is the case, what happens if while no stops are hit, your stocks that u have positions in are moving very slowly (albeit upwards) and ur system picks up a stock which is really firing, but your cash reserves have dried, so u cant take a position, do u decide to close one??

That's easy: if you trade a system then you follow the system. I don't go off chasing the next hot stock.

obviously the one u miss out on could be a real winner and what determines the (degree of) profitability of your portfolio yet u have missed out because u are "fully invested"

And the one you just sold could also take off as well!

also - wat im trying to get at, is that is there any other reason u would exit a stock apart from it hitting your stop?

Yes - I "need" the money . Or you have another exit strategy built into your lovingly constructed and thoroughly tested trading system other than getting a stop loss exit signal.

Stevo

 

[tech/a]

If the company is researched before the investment is made the chance of failure is reduced considerably.

Your first question which stevo has offered an opinion is a very good one and one I will give my view on later today--people over for lunch--they should be very tasty!!

As to the quote above.Ive not seen any evidence which supports this.

All analysis will only supply an opinion for opening or closing a position--nothing more. It is not the analysis which will supply the profit.