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Mirza Baig
2344
Mirza Baig 2013.05.27 17:29 

Hi Raptor !

Here are my calculations, which show the "MUST" Win Rate for the following RR (I have disregarded the spreads for the sake of simplicity):

 

Reward54321
Risk 11111
BE Winning %1720253350

 

 

 How  I obtained the winning % is like this:

100% - (5/5+1)  = 17%

100%- (4/(4+1) = 20% etc. 

Is this correct ?

Thanks :) 

Simon Gniadkowski
Moderator
17963
Simon Gniadkowski 2013.05.27 17:46  
Shunmas:

Hi Raptor !


 How  I obtained the winning % is like this:

100% - (5/5+1)  = 17%

100%- (4/(4+1) = 20% etc. 

Is this correct ?

Thanks :) 

if you mean the BE WR,  you use this    Risk / (Risk + Reward)

So Risk = 1 Reward = 5  BE WR =  1 / ( 1 + 5 )  =  1 / 6 = 16.6%

Your calculations are correct but coming from the opposite direction to mine . . .  

Mirza Baig
2344
Mirza Baig 2013.05.27 17:51  
RaptorUK:

if you mean the BE WR,  you use this    Risk / (Risk + Reward)

So Risk = 1 Reward = 5  BE WR =  1 / ( 1 + 5 )  =  1 / 6 = 16.6%

Your calculations are correct but coming from the opposite direction to mine . . .  

Yes, 100%...I just used the other way around. You using Risk first and then dividing it where as I used Reward.

 

Reward = $50

Risk = $10

So the BE Win Rate would be:

Risk / (Risk + Reward) = $10 / $60 = 16.67% (or 17% when rounded off)

or Reward / (Risk + Reward) = $50 / $60 = 83.33%, then subtract this from 100%, when get 16.67%

Mirza Baig
2344
Mirza Baig 2013.05.27 17:52  

This also means, from 25 trades, only 4 trades (round off to 5) needs to be profitable to breakeven.

17% of 25 = 4.25 

Simon Gniadkowski
Moderator
17963
Simon Gniadkowski 2013.05.27 17:52  
Shunmas:

Yes, 100%...I just used the other way around. You using Risk first and then dividing it where as I used Reward.

Mirza Baig
2344
Mirza Baig 2013.05.27 17:55  
Yes, mathematics really help in this case, if we have a streak of losses. But practically, while trading, I cannot imagine how it will work. 
Simon Gniadkowski
Moderator
17963
Simon Gniadkowski 2013.05.27 18:00  
Shunmas:
Yes, mathematics really help in this case, if we have a streak of losses. But practically, while trading, I cannot imagine how it will work. 
It's not for trading . . .  it's for strategy analysis,  in the same way that the Strategy Tester is also for strategy analysis.  Why would you go live with a strategy that is hardly any better than a "coin toss" ?
Mirza Baig
2344
Mirza Baig 2013.05.27 18:27  
yea, strategy analysis or in the similar vein, trading system analysis.
Alain Verleyen
Moderator
28683
Alain Verleyen 2013.05.27 19:52  
Shunmas:

This also means, from 25 trades, only 4 trades (round off to 5) needs to be profitable to breakeven.

17% of 25 = 4.25 

5 trades needed not 4.
Mirza Baig
2344
Mirza Baig 2013.05.27 19:56  
angevoyageur:
5 trades needed not 4.
Yes, I mentioned that in brackets. :)
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