Pax_FX posted: I wanted to create a thread that asked the following questions...
What are good stats in forex?
Are there stat values that show a system still has problems even if it is profitable?
Thank you for your time
Answers: - track record is verified and the connected broker is already known and has a good regulation (FINMA; ESMA/CYSEC; NFA; FCA; BAFIN; IFSC, or any good regulator in your area), so you can be sure the results shown on myfxbook are 100% real - monthly profits are between 0.50% and 9.50% (some months with more than 10% are still okay) during a period of more than 2 years; this is showing you a consistent and safe long-term trading style - the overall drawdown is lower than 50%; some spikes are okay, but it should not always be more than 20% per day traded (1-10% is still okay) - a maximum of 2 or 3 assets are being used at the same time; if you see a system trading with a huge amount of different trades at once it's most probably a very risky system - more than 50% of all trades are profitable and the profits are always higher than the losses (no matter if money or pips); this shows you a profitable money management - the lot-size per trade seen on the history is never too much; always remember: 1lot per 100k account size (at a max. account leverage of more than 1:100) is okay - pips are always positive, not negative; negative pips but still being in huge profits might indicate a risky martingale trading style - the 'gain' is always around (or even lower than) the 'absolute gain'; only the 'absolute gain' shows you the real profits (without all the deposits) - the myfxbook-system is being updated minimum 1 time per day (it depends on their server-load, sometimes it takes even 2 days)
grumpychef posted: Dude, it's all about your risk management. If your Risk:Reward ratio is too heavy on the Risk side, then you will outdo your success rate's gains very easily (as you have observed). Read van Tharpe. Ideally you want an R:R of 1:2. This means you could lose 50% of the time and break even. Also note this means you have to have strict Stop Loss analysis and calculate your position according to your Stop Loss and your overall Risk, per trade, of your capital (aka The 2% Rule). Do not, ever, calculate your position size based on what you want to gain.
You need a structured and disciplined calculation system. In doing so you will also be able to get a sense of what stats work for your trading style.
I second this, incuding the 'read van Tharpe' part - his book Trade your Way to Financial Freedom offers good advice. He also writes about testing your system, there are methods to quantify the reliability of your trading method, especially your entry. Other than this the important things have already been mentioned before my post but I would like to add, as you yourself Pax_Fx have mentioned, being disciplined and sticking to your plans is a very important factor, failing to do so can render even the best strategies totally useless.
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