Hey Traders,
“What is your win rate?”
It’s a common question from those interested in Option Pit services …
Personally, I’m surprised people care about this so much, because it misses the big picture.
For me, it has always been about how much money I can make in total, not individual wins and losses.
But as I have engaged with clients and students, I’ve learned to understand this is a question more about internal fortitude than it is about making money.
So, let’s talk about win rates.
First, they really depend on what you are trying to do.
If you are trying to trade volatility, you may expect one win rate. If you are trying to trade directionally, you may expect another.
Let’s start with directional trading. As a market veteran I have been involved in trading for 20 years and this has, naturally, given me some insight into how stocks move.
When I add in expertise from Option Pit’s Licia Leslie (a former Chicago Board Options Exchange market maker, master technician and author of our Profit in Pumps newsletter), I can pick stocks directionally at well ahead of average.
Now, by using volatility, which is the key to my trading, I am able to push my win rate to 59%.
But that doesn’t mean I win two, lose one, then win two, etc.
My returns can be a touch chunky…
I will roll off six winners in a row and then four losers. It’s just the name of the game in directional trading.
We’ve also seen this in our Robinhood Trader and Sharp BETS programs. When we win, we win over and over and over again …
But losers also group together.
The key difference is the volatility component.
By using volatility, we have gotten asymmetric returns.
In both Robinhood Trader and Shar Bets, I have seen 100% losers. Not ideal, however, it’s a part of the game when I think I am right.
BUT … I have also had 485% returns in RHT and 278% Sharp BETS.
Both programs have absolutely killed the market …
Last year, for instance, I increased my Sharp BETS account by 198% on a 66% win percentage.
But one thing was required — time
With time, using volatility, I will beat the market …
But I could go through a month of losing to get there.
In the end, thanks to vol, the win rate number doesn’t really matter.
Your Only Option,
Mark Sebastian
