Im new to babypips, but i have been experiencing the FX markets for 5 years now. I keep trying to find an edge but you know how trading can be tricky. I do not believe there is a holy grail way of doing this but, it can certainly be done if your winners are more than your loser trades. My question which i would highly appreciate your inputs would be,
How many winner trades have you guys experience in a row?
if you dont mind me adding and optional question, are you intending or already using a specific trading plan (betting plan) and if yes, would you mind sharing some info about it.
Thanks, hope to have a nice interacting session.
Keel
When your risk/reward ration is 1:1 or less then you need a 50% winning percentage or more. When your risk reward is 1:4 then you need a 20% winning percentage. So it depends on how you trade!
All you can really say is that the probability of experiencing a sting of N wins is a function of the win rate,
If you had a 100% win rate, your maximum number of winning trades would be equal to the number of trades taken by your system at any point
If you had a 0% win rate your maximum number of wining trades would be 0
That’s the easy stuff out of the way
For any win rate in the middle of those two extremes you can only work out the probability of hitting N consecutive wins, to use a ridiculous example you might have a 10% win rate, but could theoretically experience 100 consecutive winners. The probability of that occurring would be astronomically low, but it could happen.
You can ask a bunch of guys on a trading forum how many consecutive wins, and even if they’re all trading a system with the same win rate, you’ll get a bunch of different answers ! One guy might say 5, the other 25 and both are equally correct of course
If someone tells you their maximum consecutive wins is 17 it doesn’t really help you very much unless you know a great deal more about the system metrics that they are trading. You’ll have no idea 17 is much more than you’d expect, or much less.
I think it has a lot to do with expectancy too. You can have a low win rate or one that’s below 50%, but if most of your trades are 2:1 or 3:1, you can still end up profitable in the long run. This could have more to do with managing your trades right, adjusting your risk, or pressing your advantage.
I do agree with “simbafx”, Knowing a number of consecutive winners without actual ratios would not actualy help. The higher the risk/reward ratio, the harder it becomes to achieve consecutive wins. Again, it depends on the trading system or approach that is used and time frames.
I guess what I’m looking for is traders who apply 2:1 ratio (probably the most approach traders use, or at least i hope they do), how often any of you hit at least a number of consecutive wins?