A strategy with high win rate vs large losses

General
1

Hello,

I tested a few strategies with a win rate larger than 80%. The losers however even the profits.
If I implement stops the win rate drops and it’s not profitable also.
Is there a good way to handle something like this? (maybe a sample in one of your courses?), or better to drop the idea/s?

Thanks.

2

Hi Shay Marom,

That’s a common issue with high win-rate strategies — a few losses can wipe out gains. You could try alternative exits, like a soft stop (wait-and-watch) and a hard stop (immediate exit), or filter out trades during high volatility. Focusing on strong trend regimes can help too.

Ideally, it’s worth analyzing what’s going wrong in losing trades — are there patterns or early signals? You can even try a machine learning approach to predict loss-making trades. Use features like lagged volatility, technical indicators, and even a “lagged success” variable (e.g., was the last trade profitable?). Since this would be an imbalanced classification problem, you might need re-sampling techniques or threshold tuning.

ML courses — feel free to explore:
:link: Quantra by QuantInsti | Courses on Algorithmic and Quantitative Trading

Regards,
Ajay