Setups
Any trading strategy/system is welcome
Criteria
Trades with Risk Reward Ratio at least 1:1/2
I personally aim for 1:2, but it is challenging to locate the setups.
Simple Math
Two parameters define it
Any trading strategy/system is welcome
Attached File(s)
!!Risk Reward Indicator.ex4
31 KB
|
808 downloads
|
Uploaded Oct 17, 2015 7:32pm
Attached File(s)
!!Mask Orders.ex4
22 KB
|
681 downloads
|
Uploaded Oct 17, 2015 7:33pm
Criteria
Trades with Risk Reward Ratio at least 1:1/2
I personally aim for 1:2, but it is challenging to locate the setups.
Simple Math
Two parameters define it
- Hit Ratio
- Risk:Reward
Formula to calculate your required Hit Ratio with a predefined R:R to gain profit
Hit Ratio = 1/(Reward/Risk + 1)
This formula does not include trading costs like spreads and commissions
Example 1:
- Your RR = 1:2
- Hit Ratio = 1/(2/1 + 1)
- Hit Ratio = 1/3
- Hit Ratio = 33%
- You need to win only more than 33% of your trades to make profits.
- In real trading considering other factors, Hit Ratio ~ 40% to make profits
Example 2:
- Your RR= 1:1
- Hit Ratio = 1/(1/1 + 1)
- Hit Ratio = 1/2
- Hit Ratio = 50%
- You need to win only more than 50% of your trades to make profits.
- In real trading considering other factors, Hit Ratio ~ 60% to make profits
Example 3:
- Your RR= 1:1/2
- Hit Ratio = 1/(0.50/1 + 1)
- Hit Ratio = 1/1.5
- Hit Ratio = 67%
- You need to win more than 67% of your trades to make profits.
- In real trading considering other factors, Hit Ratio ~ 75% to make profits
Example 4:
- Your RR = 1:3
- Hit Ratio = 1/(3/1 + 1)
- Hit Ratio = 1/4
- Hit Ratio = 25%
- You need to win only more than 25% of your trades to make profits.
- In real trading considering other factors, Hit Ratio ~ 33% to make profits
Example 5:
- Your RR = 1:5
- Hit Ratio = 1/(5/1 + 1)
- Hit Ratio = 1/6
- Hit Ratio = 17%
- You need to win only more than 17% of your trades to make profits.
- In real trading considering other factors, Hit Ratio ~ 25% to make profits
Poll Updates
Answer the poll to give statistics what most traders use.
Good luck to all,
swilliam
Profit is on the other side of your mind