Hey guys! How many trades would you say are ideal to calculate an accurate win rate?

That depends entirely on your plan win rate. I have a classic book titled â€śHow to find a black cat in a coal cellarâ€ť by Joseph Buchdahl. - The Truth About Sports Tipsters. At the back of the book, there is a table of odds and likely number of trades (bets) that would need to be made to accurately determine whether the tipster results could be down to chance, or are indicative of a trading edge.

Here are some extracts.

For a 20% yield, odds of 1.5/1 A 1.5 reward to risk, or RR, 52 trades. For a 2RR, 133 trades, For a 10RR 1,432 trades.

For a 10% yield, odds of 1.5RR 241 trades, for a 2RR 539 trades, For a 10RR, 5,301 trades.

These stats assume that there is only a 1% chance of predictions making profit by luck instead of by edge.

Thank you for responding to this post. I will look into the book, it sounds very interesting! I appreciate the detail you went into when you described the percentage yields and the risk reward ratio I would need to achieve that yield. Thanks again!

In the grand scheme of the universe, the win ratio is immaterial. There has been a large scale research of 25,000 traders ratios over a year, which resulted in a win rate of c.60%. However, overall, losses were greater than the profits by a similar margin.

I know of scalping traders who are profitable with a 20% win rate. However, as a rule of thumb, if your buying and selling win rates are within 4% of one another, your strategy is sound.

I agree. If the winning percentage is high, the strategy will prove to be strong. We have to continue working with that strategy in phases. And each one has to trade by managing a 1: 2 risk ratio with a certain stop loss.