Informed Traders are a class of traders in which their orders get passed through to the Interbank Market, not traded against within the broker’s book. Do you know this or no?
Tell me how Goldman Sachs made 70% of their profit in 2022. Trading against their clients. Every bucket shop does that against the Uninformed Traders.
An easy distinction between Informed and Uninformed is how much money they have. A broker will analyze your age, experience (if chosen to disclose), income (if chosen to disclose), and most of all how much money you have. A bad (uninformed) trader will always have less than $1000 in their acct. Those traders will always be traded against. High leverage, high R:R, they’ll give the broker a 3:1 RRR which will win for the broker >70% of the time. If it doesn’t, they’ll widen the spread or run the market until that money is back.
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I belong to the OrderFlowTrading group. Darkstar @ FF opened my eyes 
Here’s a spreadsheet I made with correlations to the backtesting I’ve done. I do not have a formula for this. So far this data is only derived through experience.
I just knocked out trading EurUsd (4hr chart) January 2022-August 2022. The criteria was that I would take a trade Long and a Short with a 130 pip stop loss and 100 pip TP, reenter the same direction 3 candles after the trade ended. A 1:0.77 Risk to Reward ratio. Based on the chart above, I have about 56% expected win rate. Ignore the dashes between the distribution of wins and losses… had to make them to not get lost.
EURUSD LONGS ONLY
WL-LW-WL-LL-LW-LW-LW-LL-LL-WL-WW-WL-LW-WL-LL-WL-WW
**WIN 15/34 44%**
**LOSS 19/34 56%**
**-------------------------**
EURUSD SHORTS ONLY
LW-WL-LW-WW-WW-LW-LL-WW-WW-WW-WL-LW-WW-WW-WW-WL-WW-LW
WIN 26/36 72%
LOSS 10/36 28%
--------------------------
1:0.77 Risk(130 pips):Reward(100 pips)
Overall
58% wins
42% loses
Overall distribution in order:
LW-WL-WL-LW-LW-WL-WL-WL-WL-WW-LL-WW-LL-LW-WL-WL-WL-WL
WW-WL-WW-LW-LW-WL-WL-WW-WW-WL-WL-WL-WW-LL-WW-WW-LW
This is not the final product. This is the sample set to make one with.
Yes, I do put extra O’s in certain words. Like, for example, moooore winning trades! And less looosing trades 
Sorry for the typo in the post. I meant to type losing trades, not loosing trades. But I hope I don’t get loose when I lose 
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One has to tell him, that one of his sheeps strayed to far from herd.
You are a very poor trader, that you say something like that. You know nothing. You wasted your years on the market. Market doesn’t rally out of a 27% pullback every month you know…
I didn’t say it was 48%, it was a significant drop so that i naturally chose 1:2.
No i am not tired of being rich. I just slowly started increasing my risk on it.
You throw around with statistics from backtesting, i confronted you with real live trading statistics that challenge your premisse and you just wiped it away, calling me a liar.
Your winrate goes up with better entrys. Random entrys can’t match entrys from a solid strategy. You said yourself that you can boost your winrate at 1:1 from 50% to 51-53%. How hard is it to believe that a majority of those wins with 1:1 are trending further and also hitting 1:1,5 and 1:2?
You can’t even beat the underlying index you scalp with a leveraged account. I would rather have random entries than a negatively skewed expectation like yours.
Next sample set for EurUsd January 2022-August 2022:
210 pip stop, 200tp
EURUSD UP ONLY
LW-LL-WL-LW-LL-LW
WIN 4/12 33%
LOSS 8/12 67
EURUSD DOWN ONLY
WL-WW-LW-WW-LW-WW-LW
WIN 10/14 71%
LOSS 4/14 29%
1:0.95 Risk(210 pips):Reward(200 pips)
14/26 54% wins
12/26 46% losses
Overall Win&Loss distribution: WL-LW-WL-WL-LW-WL-WL-WW-LL-WL-WL-WW-LW
EXPECTED: 51% WINHe’s both rude and stupid. Apparently markets don’t trend in forex and strategies play no part in the outcome of any trade. Your chance of winning on a 1:3 trade is the same if you go long or short at any moment in time. Even if the market has been in an uptrend for 3 months.
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3rd & final sample set on EurUsd Jan 2022-Aug 2022:
300 pip stop, 300 pip tp
EURUSD LONG ONLY
LLLL
0/4 0% WIN
4/4 100% LOSS
EURUSD SHORT ONLY
WLWWWW
5/6 83% WIN
1/6 17% LOSS
1:1 Risk(300 pips):Reward(300 pips)
5/10 50 % wins
5/10 50 % losses
Overall Win Loss Distribution: WL-LL-WL-WL-WW
EXPECTED: 50% WINYou didn’t even know about Informed Traders. Every bucket shop trades against you. The end. You really think they’re in the option market hedging deltas or seeking additional liquidity with your 1 standard lot… If you trade with a higher than 1:1 Risk to Reward multiple, they will take the other side of the trade. Their expected win is the inverse of yours.
Are you referring to me? Of course markets trend… do you know they’re going to trend in the future? No. I’m not sure who said strategy plays no part in the outcome of a trade. I do have a strategy, but the strategy works in all markets at all times. No entry criteria as long as the market is efficient at the time of entry. Trade entry criteria is probably the lowest point of importance. There’s a reason why we’ve been taught otherwise. Retail traders are not here to remove liquidity from the FX market, they’re here to provide it for others.
Anyone can pull up a chart and draw lines on historic price. You only need to pay attention to the current price, right now. No derivative of historic price (indicators) or historic price rate of change has predictive abilities. Volatility, liquidity, and market efficiency do.
Here’s that trade sample set, optimizing to handle 5 consecutive losses. It’s still a work in progress, and in combination of the 2nd and 3rd trade sets, it’ll help to smooth out that dip of 3 consecutive losses. Loss multiplier is still a little high-slope for me… but we’ll see.
Screenshots of the EurUsd set 1 Sheets doc attached:
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Edit: Tightened Set 1 up a little:
Final Result of those 3 trade data sets, combined in chronological order. Large drawdown took place between mid-February and mid-March where volatility spiked up, markets became less-efficient during that time searching for orders and an equilibrium.
The next pair I’ll do is the highly inversely correlated UsdChf. I’ll look to use the same pip SL/TP as these EurUsd trades, in the same ratio to the Average Daily Range… I’ll use the 20 day range average value to determine that.
Keep thinking like all retail traders… and you Will stay in the 95% loosing traders…
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I mean, only retail traders think about Risk to Reward ratio
You really want to succeed, you have to forget the idea of Risk Reward Ratio.
“You ALWAYS know the risk. You NEVER know the reward.”
Thats the professional mindset. You take whatever reward the market and the price action let you take.
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That’s so important, I thought it should be said again.
Probability over a group of trades is all there is unless you have enough capital to move the market.
If It works for you… That’s fine