Probability of Loss
I am talking about the probability which is given in the image attached. Do not misunderstand this probability with the another probability of winning or loosing a trade.
This Probability of Loss tells us about risk of trading with that strategy. In other words it tells us about money and risk management strategy of a trader. Risk and money management are two of most important factors in trading. For example if a trader is having 10% probability of loss = 30%. It means that there is a 10% chance of loosing ur 30% investment. If ur total investment is $1000 and u r using proportionate lot size then there is a 10% chance that u will loose $300. But 10% probability means very low probability.
You will see some accounts here on fxstat, earning very high amount of profit. Look at probability of Loss table and u will see that they r having 100% probability of loosing 100% investment. It means that even a single mis-managed trade can blow whole account.
So checking profit or drawdown alone doesnt tell the whole story. Probability of loss is an important factor too. A lower probability of loss indicates better money and risk management.
Nice explanation illiterate.
Really helpfull for newcommers who want to interpret fxstat analysis.
Very important factor indeed. Usually it is ignored while reviewing performances. It should be seen when u r choosing signal providers.
Thx for this important article, illiterate.
Originally posted by JogiVery important factor indeed. Usually it is ignored while reviewing performances. It should be seen when u r choosing signal providers.
Thx for this important article, illiterate.
Usually fxstat doesnt accept high risk strategies. I wrote this article because of demo scammers having some accounts here on fxstat. It is an "Alert" article for beginners to watch performances carefully. Those scammers r trying to sell "EAs" by showing scam performances.
Originally posted by illiterateI am talking about the probability which is given in the image attached. Do not misunderstand this probability with the another probability of winning or loosing a trade.
This Probability of Loss tells us about risk of trading with that strategy. In other words it tells us about money and risk management strategy of a trader. Risk and money management are two of most important factors in trading. For example if a trader is having 10% probability of loss = 30%. It means that there is a 10% chance of loosing ur 30% investment. If ur total investment is $1000 and u r using proportionate lot size then there is a 10% chance that u will loose $300. But 10% probability means very low probability.
You will see some accounts here on fxstat, earning very high amount of profit. Look at probability of Loss table and u will see that they r having 100% probability of loosing 100% investment. It means that even a single mis-managed trade can blow whole account.
So checking profit or drawdown alone doesnt tell the whole story. Probability of loss is an important factor too. A lower probability of loss indicates better money and risk management.
This really is an important section when trader hides other information.
Stick to your rules
It show out the expected ratio of performance but not be sure.
Very essential aspect indeed. Usually it is ignored while examining activities. It should be seen when u r selecting indication suppliers.
well, it is very good information, it can be very helpful especially for new fxstat traders... thank you for providing it
Originally posted by irfanVery essential aspect indeed. Usually it is ignored while examining activities. It should be seen when u r selecting indication suppliers.
Yes exactly. Most of the traders look at profit, drawdown and consistency. But probability of loss is an important factor which is usually ignored. I have seen a few traders here with good profit but high probability of loss which means they r not using good money and risk management techniques.
Stick to your rules