Do not be swayed by win rate

This is Geko.

There is an item in backtest data called “win rate.”

Win rate, unsurprisingly, represents the proportion of all trades during the test period that were winning trades.

Indeed, in FX, winning is something to be happy about.

Because when losses accumulate, mood also worsens.

However, when considering FX goals, it is dangerous to be blinded only by winning.

This is because the goal in FX is “to make a profit.”

Whether discretionary or an automated trading system (EA), trades are conducted with profit in mind.

To that end, two patterns can be considered:

• Patterns that steadily increase profits (small wins, big losses).
• Patterns that tightly cut losses (big wins, small losses).

These are the two patterns to consider.

For example, this is a backtest of my EA [Bunaken_EURJPY_M30] sold on GoGoJungle.

https://www.gogojungle.co.jp/systemtrade/fx/33658

The win rate is 41%.

This EA’s recommended take profit / stop loss values are [300/150 pips], but when I backtested with [30/1500 pips], it turned out as follows.

The win rate rose to 60%, right?

But which pattern actually makes a profit (in backtests) is obvious at a glance.

• Pattern with 41% win rate: net profit 1,461,997 yen (maximum drawdown 97,435 yen)
• Pattern with 60% win rate: net profit 171,884 yen (maximum drawdown 142,139 yen)

Even when checking win rate in FX, it may be wise to keep in mind that “win rate is not everything.”