Is a high winrate enough to make a profit? 🤔
• Winrate is the proportion of winning trades, but alone it says nothing about system quality.
• Always analyze winrate together with your average profit and average loss.
• Pay attention to drawdown (capital drop from peak to minimum) as it shows what you must endure.
• One profitable day proves nothing; you need a series of trades in various market conditions, taking fees and funding into account.
Example: Out of 10 trades, 7 are profitable at +1 and 3 are losing at -3. Final result: 7 - 9 = -2. That is a 70% winrate, yet the outcome is negative!
Typical mistake: Celebrating a high winrate while ignoring the size of average losses.
Which metric do you look at first when evaluating a series of trades?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
• Winrate is the proportion of winning trades, but alone it says nothing about system quality.
• Always analyze winrate together with your average profit and average loss.
• Pay attention to drawdown (capital drop from peak to minimum) as it shows what you must endure.
• One profitable day proves nothing; you need a series of trades in various market conditions, taking fees and funding into account.
Example: Out of 10 trades, 7 are profitable at +1 and 3 are losing at -3. Final result: 7 - 9 = -2. That is a 70% winrate, yet the outcome is negative!
Typical mistake: Celebrating a high winrate while ignoring the size of average losses.
Which metric do you look at first when evaluating a series of trades?
#Futures #CryptoTrading #CryptoEducation #RiskManagement