Goals & Targets
Lets discuss our goals and targets in this article.
Table of Contents
What Win% Should You Expect?
- What win% should you expect? This is a very common question. The question you should also ask (although never does) What win/loss size ratio (WLSR) should you expect, as your expectancy is a function of both win% and WLSR. (Note. WLSR is average win divided by average loss)
- Here are my general thoughts…
- This is an easy question for mechanical systems traders to answer, as their historical testing will provide target figures.
- It’s not so easy for discretionary traders. Your resultant win% and WLSR will be a function of two things –
- firstly the ability of the strategy to identify higher probability / lower risk setups which can provide a positive expectancy, and
- secondly your ability to read the sentiment of the market and to enter and manage the trades in such a way as to maximize opportunity.
- That is, it’s a function of both the strategy AND your personal performance.
- This is why honest promoters of discretionary trading strategies are unable, or unwilling, to provide potential customers with an expected win% or WLSR.
- It’s impossible to know the influence of the ‘personal performance’ part of the equation.
- In fact, if they’re being totally honest, they should say that there’s a greater likelihood of a negative expectancy.
- After all, for most new traders the ‘personal performance’ part of the equation will erode any edge that a strategy has, resulting in a consistent net loss.
- For the same reason, it’s pointless trying to compare with another trader.
- Their level of performance is completely irrelevant to you, as their ability to trade the strategy will vary from yours.
- It’s a function of their development as a trader, which will of course be different from your level of development.
- The only figures that are relevant are your own current win% and WLSR.
- Accept whatever figures you’re currently getting, and then work towards gradual improvement.
- Trade the strategy.
- Identify your current level of performance.
- Then implement a Trade-Record/Review-Improve process (Volume 7), working to increase your performance over time.
- Do NOT trade in a live market environment until your performance is showing a positive expectancy.
- Win% and WLSR are not so much a function of the strategy;
- the much more important factor is your own level of development as a trader.
- My strategy works. I can trade it successfully.
- That doesn’t mean anyone else can, without having gone through the process of learning to trade it.
Target Goal for Positive Expectancy
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Stats
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Another Option – For the Consistently Profitable
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Please note that these percentage targets will require a minimum 5 trades per day; and a minimum of 20 trades per week (allowing for public holiday weeks). Any less than this, and carry these trades over to the next day or week, as required.
As mentioned before, this is only to be adopted once you’re achieving overall positive expectancy and have therefore got your risk under control. In the meantime, you may wish to use it alongside your tracking of individual trade results.