Why Risk Management is King: >60% win rate on 22 major pairs

EDIT: Forgot Tradingview calculates in ticks, not pips… so this is a really good script for grabbing 35 pips at a time. :rofl:

Tinkering with a momentum & divergence setup on a 8hr chart for:

AUDCAD, AUDCHF, AUDJPY, AUDUSD
EURAUD, EURCAD, EURCHF, EURGBP, EURJPY, EURUSD,
GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPUSD,
NZDCAD, NZDCHF, NZDJPY, NZDUSD,
USDCAD, USDCHF, USDJPY

AUD pairs were between 71.62% and 76.85% win rate
EUR pairs where between 81.38% and 61.7% win rate
GBP pairs where between 85.59% and 80.62% win rate
NZD pairs where between 75.69% and 68.27% win rate
USD pairs where between 72.12% and 73.72% win rate

Profitability ranged from 75.89% to 469%
Number of closed trades ranged from 615-694 trades per pair

Avg # bars in winning trades = 3
Avg # bars in losing trades = 5

Avg win % gain = 1.04%
Avg loss % lost = 2.23%

Avg largest win % gain = 2.68%
Avg largest loss % lost = 3.19% (EUR/CHF was -14.76% :face_vomiting: )

Avg Sharpe Ratio = 0.651 (not amazing)
Avg Profit Factor = 1.688

Avg Max Drawdown = 6.82%

Max allowed consecutive loss per instrument, per week = 3
Max allowed consecutive wins per instrument, per week = 5

Max % equity loss per week = 2%

Max position size % of equity = 5%

Trailing stop set to 300 pips
Take Profit set to 2000 pips

If the risk management is turned off and the script only closes on the reverse signal, profits turn into outright losses on all pairs. Win rates drop to 25-40% range, “profits” range from 124% to -47%; average around 5%-7% by my guess.

2 screens per currency, don’t want to spam all 22 :smile:










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Can you explain what you mean by risk management? like get out of a trade once you get 1:2 risk :reward ratio?

Yes + amount of portfolio you put into trades (market exposure) + size of trade(s) + stop loss / trailing stop level (tolerable loss) + knowing when to quit + knowing when to take profit and not be greedy

What strategy did you use to get this? whats you edge? how i can set a TP and SL with good risk management?

I’d have to dig up the script but I think this was based around TRIX indicator.

As for the other questions; that is up to you, your risk tolerance level, and method of trading. Make a set of rules and follow them, adjust & refine over time.

gottcha, Did you jsut trade TRIX if it crosses the 0 line?

Went back and looked at the script - it was a TRIX crossover indicator I wrote up in Tradingview’s Pine Script.

TRIX zero-cross is a little laggy, even swing in chop, or throws too many signals if you speed it up. I stacked a 6 & 8 TRIX and traded the cross of the pair.

If you’re curious about it, I’ve published the indicator only here: Double TRIX Crossover — Indicator by fauxlife — TradingView

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