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I think it's a mix of both
For example 55% win rate with risk to reward 1-1.5 still profitable
And 45% win rate with risk to reward 1-2 also profitable
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Last updated: 11/16/2023 15:13
I would prefer a high risk-reward ratio over a high win rate.
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Last updated: 11/16/2023 17:28
Both a high risk-reward ratio (RR) and a high win rate are important aspects of successful trading, but they have different implications for your overall profitability.
**High Risk-Reward Ratio (RR)**
A high RR means that you are risking more money than you expect to win on each trade. This can be a profitable strategy if you can consistently pick winners, but it also means that you will lose more money on your losing trades.
**High Win Rate**
A high win rate means that you are winning more trades than you are losing. This is a less risky strategy than aiming for a high RR, but it also means that you will make smaller profits on your winning trades.
**Which is more important?**
The relative importance of RR and win rate depends on your individual trading style and risk tolerance. If you are a risk-averse trader, then you will likely prioritize a high win rate. If you are willing to take on more risk, then you may be able to achieve higher returns by aiming for a higher RR.
**Simplicity**
In terms of simplicity, win rate is a more straightforward concept than RR. RR is a ratio of two numbers, which can be difficult to calculate and interpret. Win rate, on the other hand, is simply a percentage of winning trades.
**Overall**
Both RR and win rate are important factors in successful trading. However, the relative importance of each factor will depend on your individual trading style and risk tolerance. Win rate is a simpler concept to understand, but RR can be a more powerful tool for achieving higher returns.
Ultimately, the best way to determine the optimal balance of RR and win rate for your trading style is to backtest your strategies and experiment with different ratios.
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Last updated: 11/22/2023 04:30