Why Do I Want a High Win Rate Anyway

You all know by now that my number one requirement for my trading profile was a high win rate. Why is that important to me? What is wrong with a 33% winrate and average win size to average loss size ratio of 3 to 1? Throughout my years of trading I found that anything less than my 65% winrate gives me not only a much higher number of losing trades but also a huge increase of losing days.

The methodology I have shown in the blog has a win rate of over 65% and the average win being more than twice the average loss. Now a days I don't often have a losing day because: I rarely fiddle with my trading setups or trading plan and, because of the high winrate it rarely turns into a losing day. I do trade some lower % trades - outside in trades - that are not shown in the blog yet.

I have backtested my methodology and know what to expect. Knowing "what to expect" is a very important part of achieving CP (consistent profitability) because it is one of the necessary crutches I need to keep disciplined enough to stick to my trading plan. Why? Well, I think it is because if I had a low win rate, the number of possible losing trades in a row would be much higher and lots of losing trades in a row brings doubt into my mind and affects my confidence in my trading plan.

The mathematics of my trading plan is the cornerstone of what I do every day. I don't make any changes to it until I have both SIM traded it and backtested it and satisfy myself that it would be a permanent improvement in my win rate. I would not make a change to my trading plan that reduced my win rate unless the by product was to increase my average win size greatly.

Flobot entries for today's ES are below.

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