Something for you to ponder: With a win rate of less than 40% over your last 500 trades, do you think it would be more effective to begin analyzing your losing trades or your winning ones? Which should you start tweaking to achieve the most significant improvement in your profit factor and win rate?
By analyzing your winning trades, you can identify the strategies and setups that are working best for you. Understanding these can help you maximize the profitability of these trades, potentially increasing your profit factor even if your win rate remains the same. Once you know what works, you can refine and scale those strategies, applying them more consistently. This could lead to an improved win rate as you focus on executing your most successful setups more often. Winning trades often reflect your strengths. By analyzing them, you might discover opportunities to adjust your risk-reward ratio to better align with your trading strengths.
@jfsrevg Winners. A lot of pro traders have less than 40% win rate. As long as your R/r is keeping you profitable, study what made winners winners and find more like them.
@jfsrevg It’s a great question Jeff. It terms of bang for your buck, increasing winners will pay you more However if you can reduce your standard stop in terms of R by even 5-10% and take profits in the same place, then your winners will increase proportionally.
@jfsrevg I’m relatively new and have a 60% win rate and I think that’s because I look at every losing trade and ask why it didn’t work, most times I missed an important detail or piece of the context, not every time but most, there’s lot to learn from losing trades
@jfsrevg You could do both sure, but would depend on my R:R. If i'm up 4 or 5R on 40%, i'd love to check for similarities/learnings. Currently i review 1 winner and 1 loser, starting with the largest and working back
@jfsrevg When WR is low the question to ask is 'how can I introduce more skew?' And the best way to do that is studying big winners to see: (1) where you could've entered earlier and (2) where could you stop out earlier. Doing the above would drastically increase skew.
@jfsrevg Both. Have to figure out how to do more of what’s working and less of what isn’t
@jfsrevg I would say if you're still taking full 1R losses, finding a way to reduce that is your first priority because you have more losers than winners. That could have the biggest impact on your profit factor. Then once you've addressed that, you can focus on studying your winners.
@jfsrevg 🥇 But I’ve made assumptions like you’re a good trader who takes proper +EV setups and respects stops, no losses bigger than 1R + slippage. If that’s true, the only mechanics to consider are exits for a profit or sub-1R loss (stop has been adjusted). Also analyze “missed” trades.
@jfsrevg Both. Analyse whats a good trade and whats a bad trade.
@jfsrevg Start with losing trades. Identify and fix recurring mistakes to cut losses. Then, analyze the winning trades to find what works. Focus on risk management: cut losses quickly and let winners run. Keep refining the approach—trading is a continuous learning process.
@jfsrevg Not possible to decide based on win rate alone. Whats the profit factor?
@jfsrevg The great David Ryan quoted the legendary Bill O'neill when he stated that at the US Mint they are taught to recognize the perfect bill not the fake one. So I vote for winning trades!