For my own clarity, you are saying that if you take random entries and set 5:1 SLs:TPs your win rate would be 5/6? 3:2 would give you 3/5, 2:7 would give you 2/9, etc.?
(And this assumes no overarching bullish or bearish bias correct? Or is the theory/principle behind this somehow trend-agnostic?)
The final implication being:
You need a strategy with a positive gap between the win rate and R:R (SL/TP) profile to have an edge.
Did I get this right?
So:
- A 87.5% win rate would give that 5:1 stop loss a ~5% edge
- A 65% win rate would give that 3:2 a 5% edge
- A 50% win rate would give that 2:7 a ~27% edge
Yes?
Basically, if your win rate and R:R (PF) are inverses, it proves your setup produces basically random results and you have no edge.
Without looking at anything else, the fact that @shanmugapradeep’s win rate is slightly below what his R:R requires, suggests that his setup probably produces random results that he is slightly underperforming.
Correct?