In this video, I share with you why risk to reward is only half the picture.
Instead you need to focus on these 4 things to determine whether you'll be consistently profitable over the long run.
I hope you’ve enjoyed this week’s video post. As always, comments are welcomed and encouraged. Cheers!
Thanks for watching!
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Instead you need to focus on these 4 things to determine whether you'll be consistently profitable over the long run.
I hope you’ve enjoyed this week’s video post. As always, comments are welcomed and encouraged. Cheers!
Thanks for watching!
FOLLOW ME AT:
Facebook: https://www.facebook.com/groups/forextradingwithrayner
Twitter: http://www.twitter.com/rayner_teo
My YouTube channel: https://www.youtube.com/tradingwithrayner
You told the truth in consolidation markets which most of times i mean 70 percent of the time market does not give us even 1 to 1 rr .
When you see the market heading in your direction move your stop loss to break even lol, how will you lose 9 times out of 10 when you are always moving your stop loss to break even
The way i see it, you observe your RR ratio in your backtest. Once you know it, say 1:2 , then you take profit based on 1:2, so if i bet 100, then once i see 200 profit i close the trade .. since backtest says more than that is probably going to hurt me by a reversal.
Mathematically it’s true. But in reality it’s easier to have a strategy with a high risk reward than a high win rate of 90%. The market is not our market. I don’t like how to support your argument you took a bad example. With a 1:5rr and 20% win rate strategy you are profitable.
As a wyckoff smart money trader, I found RR is everything and of course winrate of 40% is nore than enough
This is a great mathematical example but terrible advice. A good trading strategy can make a high RR/low win rate far more profitable than it could ever be the other way around. For starters you’re assuming that a 90% win rate is an obvious and easy thing to achieve. Now we’re not that stupid are we, or maybe you think we are? It’s as if you’re trying to set traders up for a trap which makes me question how legitimate you actually are. I should report you.
Amazing
I needed this so badly
2:1 is always a hit for me even with 50% win-rate, I make money. So that will be cool. The Thing is, you also need to qualify a set-up if it is really doable to give you whatever RRR you use. Say for example, of you use 2:1, and let's say the target profit of 2R needs the market to move 100 pips on your favor, dont take a trend that compromises that movement. Always trade in the direction of "LEAST RESISTANCE" so that you can have a large chance that market will hit your preplanned target according to your Risk Reward. And BTW, 5:1 is not realistic, who uses it by the way??
I feel Apart from risk to reward and winning rate we also need to see order of occurrence of winning and losing trades.
I think you will be loosing trader that is why you are eager to teach this kind of stuffs.. Stupid if you don't risk how much you read going to loss in every trade then you r not good business man.. It is necessary to fix your risk per trade
Kindly suggest how to reduce the loss size.
Hi reynar, I am using similar options high risk low reward with90%percent winning accuracy. However like 1loss out of 9win offsets my profit. I usually do the shorting stocks which are moving high for a minor retracement and cover my position
Thanks Rayner. every training video i watched are indeed very concise and helps beginners a great deal..
Finding a 90% winning system is difficult as well and working on a 10% winning system is insane.
Your example is not realistic.
R2r should be 1:2 with 40% winning rate.
Risk to reward should be 1:1 with 60% winning rate.
1:2 r2r with winning rate of 40%..
Then you'll be succesfull.
I think that you are very bad in math, sir. Because if your RRR is 1:5, you can expect a 20% target hit. That are 2 profitable trades out of 10, that means profit of 10 dollars. On the other side your loses are 80% out of 10. That means loss of 8 dollars. Now calculate the profit of 10 bucks against the loss of 8 bucks.
5 to 1 is exaggerated,realistic is 2 to 1
thank you! Hope to see more video from you 🙂
Clear explanation about s&r. really helpful in learning forex. thanks Rayner.
I agree. We should be playing a game with positive expectancy. However, the asymmetrical R/R ratio is a necessary component of trading success. Jerry Parker said it best, "Trading pros who profit and survive are committed, or I say obsessed with asymmetrical risk-reward”.
Thx for your graphic illustration. Please advise>>>> If I want only 0.03$ target per trade ( 0.2 Profit+0.01 Commissions) then what should be the Risk and Reward Ratio I should follow? I have tried Stop loss at 0.15 in trade but many times the stop loss was hit and after some time my target of 0.03$ also achieved. So how to go ahead with this so that stop loss not hit and minimal profit also achieved.
thx for your video, are you located in HK?