Measuring the performance of a forex trading strategy is very important for various reasons. It is vital to stay true to the chosen forex strategy or forex system until it is proven that it does not work. Additionally, it is only advised to make change when it is necessary despite the fact that strategies and [...]
The formula of expected value, that is (hit ratio × average winnings) – (% of losing trades × average losses), perfectly shows the close relationship between the hit ratio and the payoff ratio and reflects how they influence the profitability of a forex trading system or strategy.
In Part 1, we have discussed what hit ratio is and revealed the truth on why it is dangerous to focus on high hit ratio. In this final part, we discuss why high hit ratio can be misleading.
It is interesting that the hit ratio gained so much popularity in the field of forex. In the world of trading everybody seemed to be interested in hit ratios and most of the forex systems on sale are advertised with hit ratios. We receive a lot of questions concerning the hit ratio of Stealth Forex [...]