strategy win rate question

[JS 10]

Hi everyone,

When you are calculating win rate for certain strategy, do you include "bad decision" trades? or only trades that are in compliance with your own rules in your playbook?

Also what do you consider a "win" trade? Any trades resulting 1R or above? above breakeven? Thanks!

Would be interesting to see the win rates for common strategies such as ORB and abcd etc.. Thanks!

 

Edited January 6, 2021 by Jiheng Sang

[Bailey Nevener 83]

JS,

 

This is a great question!

Personally I have seen several traders ignore the trades that they made that did not follow their trade book. 

However they would record it as a hit to their personal profitability.

 

A "winning trade" can be very arbitrary with probably only one solid definition that can be agreed upon, a "winning trade" has a positive P&L.

However, if you are trying to qualify a trade statistically as winning (even if you didn't take profit etc...) then it is up to you to set those parameters.

 

Perhaps you could make it based off of "R" values as you have suggested.  Like a 2:1 distance between your stop was "winning" at one point.

Personally in the most direct sense I consider trades that allowed me to take any profit and stop out at breakeven as winning.

 

Bailey Nevener

[cjsimon07 16]

I break things down into two categories. If the trade fits my strategy criteria, but I didn't manage it well, I include that in my data for that strategy but tag it (using chartlog) as a BM (bad management). If it was impulsive, over trading, not part of my playbook.... I don't include that with a specific strategy, but I do track it as it's own strategy "bad decision." It doesn't matter if the trade was green or red, if it wasn't a trade I should have taken according to my rules it was a bad decision.  

I used to record a positive trade as a "win" and a negative trade as a loss. Now I have 3 categories. Win = 1r or greater. Break even = +/- less than 1r. full stop = I let the trade stop me out for a full 1r loss. I label them green, gray and red. I've only been doing this for a few weeks, but I am already noticing I have much fewer green trades. My thought is the more gray trades I have with a given strategy the more I need to fine tune that strategy or my trade management within that strategy.