A 3-to-1 Win/Loss Ratio?

One of the big sales pitches of the Christos Avatar Trading VIP program is that Toby Alexander will show you a system of trading that will give you a 3-to-1 win/loss ratio.  Toby never shared such a trading plan with the room attendees, at least not explicitly, and every time I pressed him to give me guidance on trading rules with such high expectancy, he never answers my question and if he does he would tell me that I need to create my own trading plan and back test it.  Although I agree that I eventually need to do that, I believe that mentors are suppose to save their clients time by guiding them and directing them in quickly finding such trading rules – which the CAT program promised in its marketing webinars.

So with regards to such trading rules, I have yet to back test all possible combinations of entry and exit criteria on the four instruments that Toby trades mostly (namely, the NQ, ES, 6E, and 6B), so I don’t know for sure if there are such trading rules with such high win/loss ratio. However, I will share here what I found and if you have experiences yourself please share them as well.

By using the SpitFire system I was able back test a trading plan that has an 0.8/1 win/loss ratio. This plan is simple, enter on a yellow dot and supporting TraderTrend bar, and exit when a price structure is broken.  I looked at some of the back testing done by others, and found the highest profitable ratio to be 2-to-1 win/loss ratio if you follow a scalping model (enter on yellow dot and supporting trader trend bar, set a target of 2 points and stop of 2 points).   If you are patient then this system may work well, but don’t take my word for it since I was not the one who back tested it, but do you own back testing on it.

One thing to remember is that the profits for this system on any trade is very limited since you have a fixed target, and most trading coaches will tell you that you need to make your profits run (make the most of your winning trades) for you to be a successful trader, and this system does not allow you to do that.  One of things you can do is trade more than one contract and have the first contract with a fixed profit target and let your other contracts go further, which comes with disadvantage that you will be stopped out more often on these other contracts and lose money on them, and thus reducing your win/loss ratio.