The opinions expressed in these forums do not represent those of C2, and any discussion of profit/loss
is not indicative of future performance or success.
There is a substantial risk of loss in trading. You should therefore carefully consider
whether such trading is suitable for you in light of your financial condition. You should read,
understand, and consider the Risk Disclosure Statement that is provided by your broker
before you consider trading. Most people who trade lose money.
Whatever criteria you select, some system that you never heard of will pop up. However there are trade-offs with any strategy. My preferred systems (on C2) show high Sharpe and Sortino ratios. This is just return (our objective) divided by a measure of volatility.I think Calmar ratio penalizes longer running systems. My preferred research tool is return divided by average drawdown, This takes into account depth and length of the drawdown. Unfortunately, C2 does not list this statistic.
I think Carma Stocks has an outstanding track record. However, with this program as well as many other stock or index futures systems, keep in mind that we are dealing with a generational bull market. How will they do if stocks retreat or go sideways for the next five years? Diversified futures trading systems are generally not correlated with stocks.
Since in my previous post I tried to point out the importance of the ratio of average win to average loss I took a closer look at the actual computation of it as shown in the statistics and I find out that it is incorrectly computed. Should this ratio not be a simple division of average win divided by average loss? Am I missing something or is everybody else missing something? Instead of showing the correct ratio the statistics show the profit factor. Matthew please take notice.
If you are referring to the calculation of the profit factor, yes you are missing something.
The profit factor will only be equal to the average win divided by the average loss if the win ratio is exactly 50%. That is basically the same as throwing darts at the Wall Street Journal.
For trading systems that have a much higher win ratio, like ETF Volatility Timer which has an over 87% win ratio, you can have a profit factor over 1 and still have a higher average loss than average win.
The profit factor is calculated by taking the average win times the number of winning trades and dividing that amount by the average loss times the number of losing trades.
If you are referring to just the win ratio %, that is just the number of wins divided by the total number of trades. It has nothing to do, and should have nothing to do, with the average win or loss.
Thatâs what the profit factor calculates, as indicated in my prior post.
Higher win rate doesnât necessarily mean that the system is good , infact it could mean it is below average which is usually the case BTW , nor a lower win rate means that the system is bad , on the contrary it could be a great system . Anyone can have a system with near 100% win rate its not rocket science , the devil is in the details .
You completely missed my point.
When you go to the system page of any system and click on Statistics and look at the avg. win to avg. loss ratio you will find that instead of showing the correct ratio it shows the profit factor instead.
Matthew were are you? This should be corrected
I dont see that ratio , i just see W:L ratio , which is not the same . A system could have an average win of $50 and average loss of $100 but maybe it wins 10 times for every one loss .
That being said W:L ratio usually means ( number of winning trades divided by number of losses ) , but here in C2 it refers to the profit factor ( total winnings divided by total losses ) .
It still does not make any sense.
The total number of trades and the total number of winners (and percentage) is already covered, why would you now state such a useless ratio as total winners divided by total losers below average win and average loss? There clearly seems to be a mistake.
Hi Chris,
In my opinion the Forex Portal does not exhibit any red flags mentioned in this thread. My only concern is that it hasnât made a new equity high in 6 months. But, moving sideways before another turn upward is common for a good system so perhaps it just requires patience. Only time will tell. The benefit of the low subscription fee is that it makes it easier to stick with during these periods.
The W:L ratio is computed by taking aggregate win $ and dividing by aggregate loss $. It is unrelated to average win and average loss. It is simply the total win $ divided by total loss $.
What you just described is the computation of the Profit Factor. This figure is already prominently given on the preliminary statistic row on top of the system page - why duplicate it here. What should be given is the ratio of avg. win to avg. loss then one could compare it to the win ratio and get, for example, a feel if and how closely the system follows the rule âlet the winners run and cut the losses shortâ. As I stated above, just giving the win ratio without the avg. win to avg. loss ratio is at best meaningless and at worst misleading. Please consider this and give the avg. win to avg. loss ratio instead and not only here but also in the top preliminary statistics line next to the win ratio.
Average win : average loss ratio is a meaningless and misleading figure , not to mention that the average win and average loss are already mentioned in the statistics .
System A : Profitable
10 trades , 2 losses 8 winnings
Average win $5 , average loss $10
Average win : average loss ratio = 5 : 10 or 0.5 : 1
System B : Losing
10 trades 2 winnings 8 losses .
Average win $20 average loss $ 8
Average win : average loss ratio = 20 : 8 or 2.5 : 1
That is your rule, not necessarily that of successful traders. Wins vs losses donât necessarily correlate with good results. The important things are profitability and volatility. If you want to follow your âruleâ, then look at Sortino ratio. Otherwise, use the Sharpe ratio.
Every professional system designer who provides a back test and every software that computes back tests will provide in the results page not only the win ratio but also the avg. win to avg. loss ratio. These are important metrics and industry standards and C2 should do the same.
Buy the dip here? Or is this shaping up to be the largest loss of real wealth in C2 history (23 auto traders as of a week ago and a loss of over $43k since the peak). We did warn the community in another thread that trading at this leverage level using martingale techniques was suicidal and that past drawdowns are underreported because the account was resized. But time will tell if this is instead the best buying opportunity ever. Any predictions?
