The Myth of "High Winning Percentage Systems"
This myth is a dangerous beast… one you must steer clear of at all costs. These are the systems that promise a winning percentage of 90% or 95% or even as high as 98%.
Well… sorry… it just ain’t so! Trading systems that promise you a winning percentage of 90% or higher are taking you down a path of certain ruin. They make a mockery of the laws of probability and as a result… put your finances at very serious risk.
Let me illustrate by comparing a system that promises you a return of 90% with the Advent Forex system. The first system is based on a “win vs. loss” model. Advent Forex on the other hand is a high probability system, a system that looks at how much you gain on winning traders versus how much you lose on losing trades. To profit consistently over the long haul, you need a high probability system.
Notice that a higher winning percentage is NOT a guarantee of profits! That’s because it’s highly unlikely you will sustain a 90% winning percentage over time. In fact, it’s pretty much impossible.
Wins Vs. Loss System – Typical
These systems require that you place more at risk in order to win more of the time They say you’ll win 90% of the time (or more)
Example 1 – 100 Trades
90 winning trades / 10 losing trades Average gain of 1% on your winning trades Average loss of 5% on your losing trades
90 trades X 1% gain = 90% total profit10 trades X 5% loss = 50% total losses
Net profit for the 100 trades = 40% profit
The laws of probability tell us that it’s extremely unlikely that you will win 90% of the time. You may get on a streak, but what goes up will come down. You can count on it. So… let’s say that this same system is now winning 70% of the time:
Example 2 – 100 Trades
70 winning trades / 30 losing trades Average gain of 1% on your winning trades Average loss of 5% on your losing trades
70 trades X 1% gain = 70% total profit
30 trades X 5% loss = 150% total losses
Net loss for the 100 trades = 80% loss!
You’ve now endured a significant loss!
High Probabity System – Advent Forex
This system puts the laws of probability to work MASSIVELY in your favorAdvent has proven to win 60% of the time
Example 1 – 100 Trades
60 winning trades / 40 losing trades Average gain of 3% on your winning trades Average loss of 1% on your losing trades
60 trades X 3% gain = 180% total profit40 trades X 1% loss = 40% total losses
Net profit for the 100 trades = 120% profit
Let’s factor in the laws of probability and look at what happens when the winning percentage goes down to 40%. Notice that you’re still coming out ahead… very nicely ahead! This is the type of system you can count on for long-term profits!
Example 2 – 100 Trades
40 winning trades / 60 losing trades Average gain of 3% on your winning trades Average loss of 1% on your losing trades
40 trades X 3% gain = 120% total profit
60 trades X 1% loss = 60% total losses
Net profit for the 100 trades = 60% profit!
You’re still enjoying a phenomenal gain!
The numbers are very common for systems that rely on the win versus loss model of trading. In fact, they can even get worse, because if you run into a losing streak (and you will) it’s very hard to come back.
If you’re serious about making money in Forex, you need a high-probability system to consistently make profits over the long term… which is precisely what Advent Forex delivers.
The bottom line is this… don’t be sucked into those systems that promise a high percentage of winning trades.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Leave a Reply