This is the formula to calculate the needed winning percentage for a stock system to be considered successful:
Needed Winning Percentage= | 1 + (Commission / Average Result of Losing Operations) |
1 + Profit-Loss Ratio |
For example, if the total commission for a stock operation is 15€, the profit-loss ratio is 2, and the average result of losing operations is 400€, the formula to calculate the needed winning percentage is:
Needed Winning Percentage= | 1 + (15 / 400) |
1 + 2 |
Needed Winning Percentage = 0,3458 = 34,58%