Risk and Rewards

What is your risk and reward strategy?

I do not know if you can call that a strategy, but for me to open a trade there must be a 2:1 potential. To achieve that, I only strive for a 50% winning trades.

I only risk 1 to earn 1+. Sometimes I don't get the 1+ and maybe only 0.5. More importantly, I only can lose 1 while I can earn more and that is the whole strategy in a nut shell.

Does myfxBook have a feature to analyze the portfolio's risk and reward?

all you have to do is divide average win by average loss available in the Advanced Statisitics /Trades tab, or do you mean something else?

I'm saying it would be great if myfxbook add a function to automatically show Risk & Reward for each position closed.

growthera posted:
I do not know if you can call that a strategy, but for me to open a trade there must be a 2:1 potential. To achieve that, I only strive for a 50% winning trades.

50% win is good, if TP more than SL. There are a lot of successfull scalping strategies where TP less than SL, and people earn big money. Anyway there is also spread and commission so hope for 50% its too poor I think

The Risk & Reward ratio should show number similar to 1:3
meaning it will calculate how much the stop loss is, and how much the take profit or closed trade value. Then display a ratio 1:2, 1:3, 1: 4, ect...

If no value of stop loss is entered in the trade, then it will display N/A


I've attached a picture to show you where to add Risk & Reward ratio for each trade.

Add it before or After Gain %

Most trading manuals and books out there recommend using a 1:3 risk reward ratio, but the truth is that the market will no always give you that chance, so I will go for a 1:1, but sometimes I may get the opportunity to go for 1:2 and rarely a 1:3.

We go for a 2:1 R:R with a max risk of 1% per trade.
Our latest member made +5% last week doing that on his first live account - he is linked to my profile.

@BenNathanFTA - perfect .looking good but you may want an ECN broker because InstaForex is a no no for news trading

Yeah for sure, and fixed spreads where possible... Though the account I linked today is instafx and thats trading the live high impact news but totally right Ecn - far better

although most of the fx training would advice go for low risk high rewards trades but i personally feel that trade management ( when the trade is open) is more important than quantify the risk reward in number.

comeinvest posted:
although most of the fx training would advice go for low risk high rewards trades but i personally feel that trade management ( when the trade is open) is more important than quantify the risk reward in number.

Very true - trade management is key but you need that innitial controlled risk when ordering in and trading - imagine being in the shoes of those people in the CHF when the SNB removed the floor if they hadnt got good risk measures in place in terms of low risk sls etc etc

I know many who lost their entire life savings in 10 seconds when it happened due to no risk control.

Great comments ALfred :)

I try to make a profit equal risk. At the same time try not to risk more than 15% of the deposit. Profit of 5-10% per month - a good result.

BenNathanFTA posted:

comeinvest posted:
although most of the fx training would advice go for low risk high rewards trades but i personally feel that trade management ( when the trade is open) is more important than quantify the risk reward in number.

Very true - trade management is key but you need that innitial controlled risk when ordering in and trading - imagine being in the shoes of those people in the CHF when the SNB removed the floor if they hadnt got good risk measures in place in terms of low risk sls etc etc

I know many who lost their entire life savings in 10 seconds when it happened due to no risk control.

Great comments ALfred :)

Actually the CHF news have just enlighten me on how we should trade news events , IMO high impact news event it's similar to gambling especially related to interest rate. A good trader always know how to measure the risk before look after the reward, it's good habit to know how much you're willing to lose on this trade before measuring the potential profit. Apart from that, when you're in profit, always look for counter signal sign and once you spot it, close the trade with no hard feeling.

Risk

I try to stick to at least a 1 to 1 risk/reward.