The Accuracy Trap: “90% accuracy

ABJ Finstocks about Trading accuracy

ABJ Finstocks about Trading accuracy

The favorite question of Majority Inquiries we receive in stock advisory in trading: “What is your accuracy”?
Accuracy is Filled by Finfluencers 
& Most traders fall for ads claiming “90% accuracy” 
But accuracy alone is meaningless — what matters is how much you made at the end. 

Let’s Make it easy to Understand with Different Examples

Case 1: Minor Profit, Big Loss (90% Accuracy = Loss)

  • Suppose you take 10 trades.
  • 9 trades give you +₹100 each → +₹900.
  • 1 trade gives you –₹2000 loss → –₹2000.
  • Final Result = –₹1100 Loss, even with 90% accuracy.

👉 Lesson: High accuracy but poor risk–reward = Losses.


Case 2: Many Small Losses, One Big Profit (10% Accuracy Hides Truth)

  • 9 trades lose –₹100 each → –₹900.
  • 1 trade wins +₹5000.
  • Accuracy = 10%, but Profit = ₹4100.

👉 Even with only 10% accuracy, smart risk–reward gave profits.


Case 3: Square Off with Big Profits (30–40% Accuracy Beats 90%)

  • Say you trade with 40% accuracy.
  • 4 trades make +₹2000 each → +₹8000.
  • 6 trades lose –₹500 each → –₹3000.
  • Net Profit = ₹5000 with just 40% accuracy.

👉 Here, 30–40% accuracy with high reward-to-risk ratio gives sustainable profits.

Now here who worked with such 30-40% accuracy would not focus on money made. They will conclude bad advisory. But that’s the wrong lens. Accuracy doesn’t equal profitability of strategy or judging parameter of advisory.

Formula of Accuracy: Profitable trades/Total No of trades.

This means always your number of trades Profitable should be greater Then (Loss Making Trades+ Break Even Trades) then only you are reliable as advisor but this conclusion is misleading. 

Flaws with Formula: 

  1. Considering breakeven Trades in Formula, 
  2. Equal Importance to all Trades Big Loss, Small Loss, Big profit, even Breakeven etc. 

The core message Accuracy formula is a theoretical concept 

Number of trades is overemphasised as judging parameter for trading success.

Important is Net amount that you made and not net number of trades 

Accuracy formula itself is spread by people that believe in theory and not practical training experience. It looks good in books practically of no use.

The core message Accuracy should not be a sole selection criterion for stock advisor.

So be it Intraday Trading or Short-term trading never see accuracy as your parameter to finalize the stock market advisor or intraday advisor. 
Asking Only Accuracy for finalizing intraday advisor can land you in no man’s land, Accuracy by itself alone is useless. Many other parameters together make some meaningful measure.

KNOWLEDGE BASE