In this episode, Eric continues the Automated Strategy Pipeline series by tackling one of the most misunderstood topics in trading: win rate.
Many traders evaluate a strategy based on a single number: the percentage of winning trades. But a high win rate alone doesn't tell you whether a strategy is profitable, scalable, or even worth trading.
Using real examples from his own SPX trading portfolio, Eric explains why win rate, average win, average loss, expectancy, and risk reward all work together to determine a strategy's long-term performance.
Topics discussed include:
• Why win rate by itself can be misleading
• The relationship between win rate, average win, and average loss
• Why a 30% win rate strategy can still have positive expectancy
• The differences between credit spreads and debit spreads
• How combining strategies with different risk/reward profiles may smooth portfolio returns
• The role of trade frequency in systematic trading
• Why automation makes it easier to consistently execute multiple strategies
• How Alpha Crunching's new EOD Put Debit Spread complements the existing TSE 0DTE Credit Spread strategy
Eric also discusses how he is building a portfolio of automated SPX strategies designed to work together rather than relying on a single edge or market environment.
Alpha Crunching: