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Registered User
Joined: 6/12/2005
Posts: 39
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Hi,
It seems to me that there are two dimensions for measuring the value of a trading (stock selection) strategy - the proportion of occasions it produces stocks that go your way, and how much stocks move after you have identified them. What would be a rate of success for what you would consider a good strategy, ie 60%, 70% etc?
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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We trainers cannot answer this but I will move this to the Market Talk forum so others can share their thoughts.
- Craig
Here to Help!
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Registered User
Joined: 12/2/2004
Posts: 1,775
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I'm sure there are traders that do relatively well with only 25-33% of stock trades being winners. The obvious key is being disciplined enough to only enter at low risk points (moving averages, early in breakout, support, fib retracements, etc.) so that when the price goes against you it is instantly obvious and thus makes the exit decision quick/easy with resulting minimal loss. And of course letting the winners run...and imo selling in increments as the price rises. Every now and then you'll be left with one third or one half of an original position that goes up much farther than you ever expected.
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Registered User
Joined: 4/15/2005
Posts: 5
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What percentage win is a good strataegy ? It seems that would be question that only you can answere. All good traders share this commen trait. They find a strataegy that fits them personaly. IE I might be happy with a 41% win ratio but you might be misserable with that. A general rule is the higher the % win the smaller Risk/Reward ratio. Maybe a scapler is ok with 70% win while a Trend trader is ok with 34%? Be aware that a 50% win system will have loosing runs of 12 in most 100 trade lots. Plan your money managment acourdingly. Also if you test only 100 trades the 50% system migh show 40% win or 60%. Program it in a spread sheet etc to see if you can handle the heat of your system. Heat = drawdown. Once again only you know how much drawdown you can take. The irony is if you have never had a 30% draw how do you know if you can handle it? Hope this helps 
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