A 40% win rate is enough to profit if you size positions right. Use a risk-of-ruin calculator with three inputs: your win rate, your risk-to-reward ratio, and your average loss as a percentage of account. This trader risks $1,000 to make $2,000 per trade and keeps losses under 0.5% of his account.
I trade mainly breakout. This means that my success rate is around 40%. There is what we call the risk of rune and this pretty much will tell you how much you can size. The first setting of this risk of rune calculator is what is your winning percentage? Mine is around 40%. What is your risk to reward ratio? This means you risk a thousand dollar to make 2000$. The third setup is how much in percent term is your average loss. Mine is around zero. What is the risk of fluid between let's say zero to 2% on my end as a breakout trader, this is how I size my trade. So if I have a strategy, I will allocate let's say between 5 to 25% of my account on a single algo. But I have to make sure that my average loss is 0.5% or lower.
