Hello FF.
I've just started trading live this week. I've been backtesting for over a month now, and I formulated a strategy that works for my personal style. Currently I'm focussing only on the EUR/USD pairing, and set my trades to last up to a week at a time. I've got what I think is a pretty solid MM scheme, with a 2:1 risk reward ratio. It's a conservative strategy, and I expect only modest profits... but thats ok with me. I'm trying to figure out the best risk reward ratio to use when making daily trades (i.e trades that will not carry for more that 24 hours.)
Let me start by saying that I do not use indicators. I use a spreadsheet with open/close, and high/low prices. A few formulas later and I know what direction I want to trade. I'm keeping it simple. I don't have to be right every time. With a proper MM strategy, I should be able to scratch out a profit.
My question though, is what risk reward ratio should be used for daily trades? If I'm looking for a modest, 10 to 15 pips per day, what do I do? A 5 pip S/L seems way too tight. I tested with a 1:1 ratio, but the results didn't look good. I even tested with a 30pip S/L and 15pip TP, but as expected, the results stunk up the joint.
Is there anyone here that uses a 10 to 15 pip TP on a daily basis, and if so what is your risk reward ratio? If you are aiming at 15pip TP, where do you put your S/L?
Thanks,
Tryad
I've just started trading live this week. I've been backtesting for over a month now, and I formulated a strategy that works for my personal style. Currently I'm focussing only on the EUR/USD pairing, and set my trades to last up to a week at a time. I've got what I think is a pretty solid MM scheme, with a 2:1 risk reward ratio. It's a conservative strategy, and I expect only modest profits... but thats ok with me. I'm trying to figure out the best risk reward ratio to use when making daily trades (i.e trades that will not carry for more that 24 hours.)
Let me start by saying that I do not use indicators. I use a spreadsheet with open/close, and high/low prices. A few formulas later and I know what direction I want to trade. I'm keeping it simple. I don't have to be right every time. With a proper MM strategy, I should be able to scratch out a profit.
My question though, is what risk reward ratio should be used for daily trades? If I'm looking for a modest, 10 to 15 pips per day, what do I do? A 5 pip S/L seems way too tight. I tested with a 1:1 ratio, but the results didn't look good. I even tested with a 30pip S/L and 15pip TP, but as expected, the results stunk up the joint.
Is there anyone here that uses a 10 to 15 pip TP on a daily basis, and if so what is your risk reward ratio? If you are aiming at 15pip TP, where do you put your S/L?
Thanks,
Tryad