First, let's look at a case. EA was written and tested by the author:
As can be seen from the capital curve, there are almost no losses in 380 transactions, and the actual winning rate is 99.74%. There is no jiacang behavior, and the risk is low and controllable. Investors who are just beginning to understand the foreign exchange market will certainly be tempted to use it. Let's look at another example. This EA has a warehousing operation, which is risky and uncontrollable, but explosive in the short term:
In the same trading period, the profit of strategy 1 no position increase was $65,438 +0.5 million, and the total number of transactions was 380. The profit of strategy 2 is $280,000, and the total number of transactions is 12345, all of which are the standard positions of 1. The last example, the idea is different from the above, based on the criticized Martin Geer strategy, which is repeatedly used:
In the chart, every fund decline can be erased by simple code correction. In order to demonstrate the risk point, the author did not make any amendments. Similarly, the net value curve in the second picture can also be removed, just considering the comprehensive analysis, it will remain in the chart. Through the above three EA backtesting capital curves, it can be seen that it is extremely simple and easy for the capital market to achieve a high winning rate. However, the strategy of pursuing high winning rate can only show amazing profitability in a short time, and once it is used for a long time, it will definitely cause irreparable losses. For value investors or trend investors, it follows the principle of stop loss and let profits run, and the capital curve is very different from the above. Its short-term performance is poor, but in the long run, it can bring stable and sustained income.
Source: www.ruiyinfx.net.
The first rule of high winning rate
◆ The basic principle of futures trading: recognize compensation in time, and make profits grow continuously.
A successful transaction needs a very high prediction accuracy? I want to say, "This is a misunderstanding".
◆ Don't spend too much time on "market forecast", but spend time on "risk control and fund management" to get twice the result with half the effort. "
Error in judgment is an inevitable phenomenon in the trading process, and a good trader should maximize profits, not the number of wins.
Professionals earn a lot of money because their average profit is far greater than their average loss. "
Some novices often have such confusion: some professional traders often seem to make mistakes to stop losses. Why is the income so high?
Similarly, many traders are addicted to the analysis and judgment of various technical indicators, trying to find the most effective entry point. They often value and pursue a high winning rate, and they may spend a lot of energy hoping to find a "peerless martial arts" that can be invincible in the futures market. Maybe you think you can succeed in a certain market, and this so-called success will often lead to an explosion of confidence and increase positions. In the end, it is often "possessed" by the "peerless martial arts" that I think I have found, and I bite myself in the complicated market.