【87% of trades stopped out】The only profitable strategy made money from a handful of huge wins
The only profitable strategy in my backtest had a win rate of just 12.86%—61 of its 70 trades ended in small losses due to stop-losses. What really grew it from $10k to $10,227 were the 9 huge wins. That contrast is more worth thinking about than any “high win rate” claim.
Let’s start with the numbers. Turtle trend following: 70 trades, 12.86% win rate, +0.89% annualized return, and a maximum drawdown of just -7.33%—the shallowest of the lot. By comparison: HODL returned +25.71% annualized, but had a maximum drawdown of -53.76% (more than halving your money); MACD had a 30.51% win rate, yet returned -11.27% annualized, with a -27.10% drawdown. RSI, with the highest win rate (37.96%), returned -8.95% annualized—also a loss.
How did Turtle come out ahead? In a nutshell: small losses, big wins. Cut losses quickly and keep each loss small; when a real trend arrives, stay in and let profits run. Those 9 big wins from trending markets out of 70 trades could each offset dozens of stop-losses, pulling the overall return back into positive territory. That’s how it managed the only positive annualized return with a 12.86% win rate, while also having the shallowest drawdown of the lot.
Most people treat a “high win rate” as synonymous with “making money.” These numbers prove otherwise: what determines whether you make or lose money isn’t how many times you win, but how much you make when you win and how much you lose when you don’t—your reward-to-risk ratio matters more than your win rate. Turtle traded 87% stop-outs for 13% huge wins, and performed far better than high-frequency strategies with win rates above 30%.
My take: Rather than obsessing over your win rate, first ask yourself whether you’ve actually designed your trades to “win big and lose small.” Do you trade like Turtle, with small losses and big wins, or are you doing the opposite—taking small profits and stubbornly holding onto losses?
$BTC
#Crypto
The only profitable strategy in my backtest had a win rate of just 12.86%—61 of its 70 trades ended in small losses due to stop-losses. What really grew it from $10k to $10,227 were the 9 huge wins. That contrast is more worth thinking about than any “high win rate” claim.
Let’s start with the numbers. Turtle trend following: 70 trades, 12.86% win rate, +0.89% annualized return, and a maximum drawdown of just -7.33%—the shallowest of the lot. By comparison: HODL returned +25.71% annualized, but had a maximum drawdown of -53.76% (more than halving your money); MACD had a 30.51% win rate, yet returned -11.27% annualized, with a -27.10% drawdown. RSI, with the highest win rate (37.96%), returned -8.95% annualized—also a loss.
How did Turtle come out ahead? In a nutshell: small losses, big wins. Cut losses quickly and keep each loss small; when a real trend arrives, stay in and let profits run. Those 9 big wins from trending markets out of 70 trades could each offset dozens of stop-losses, pulling the overall return back into positive territory. That’s how it managed the only positive annualized return with a 12.86% win rate, while also having the shallowest drawdown of the lot.
Most people treat a “high win rate” as synonymous with “making money.” These numbers prove otherwise: what determines whether you make or lose money isn’t how many times you win, but how much you make when you win and how much you lose when you don’t—your reward-to-risk ratio matters more than your win rate. Turtle traded 87% stop-outs for 13% huge wins, and performed far better than high-frequency strategies with win rates above 30%.
My take: Rather than obsessing over your win rate, first ask yourself whether you’ve actually designed your trades to “win big and lose small.” Do you trade like Turtle, with small losses and big wins, or are you doing the opposite—taking small profits and stubbornly holding onto losses?
$BTC
#Crypto