Risk ratio

Aug 01, 2009 at 09:27
2,896 Paparan
23 Replies
Ahli sejak Jan 18, 2022   6 hantaran
Oct 04 at 20:59
Assuming you're talking about risk-to-reward ratio, it means how much you risk vs how much you stand to gain. I have a winning rate of <50% yet I am profitable - the greater 'risk ratios' your strategy holds, the lower the win rate required to be profitable.
Ahli sejak Aug 13, 2024   34 hantaran
Oct 10 at 12:20
Another way to look at it is just keeping your losses small while letting your winners run. If you have a solid risk-to-reward ratio—like 1:3 or even better—you can afford to lose a few trades without wrecking your account.

I've had times where I took a bunch of small hits but then hit a big winner that covered those losses and more. So, it’s all about patience and not getting rattled when you hit a rough patch. Just remember, consistency beats perfection any day!
Ahli sejak Sep 30, 2024   7 hantaran
Oct 11 at 08:25
yueyang2003 posted:
Assuming you're talking about risk-to-reward ratio, it means how much you risk vs how much you stand to gain. I have a winning rate of <50% yet I am profitable - the greater 'risk ratios' your strategy holds, the lower the win rate required to be profitable.
I have this with my own trading strategy. But some many people do not understand that you can be profitable with a win rate lower than 50%
Ahli sejak Jan 18, 2022   6 hantaran
Oct 11 at 15:23 (disunting Oct 11 at 15:24)
MonterloAdan posted:
yueyang2003 posted:
Assuming you're talking about risk-to-reward ratio, it means how much you risk vs how much you stand to gain. I have a winning rate of <50% yet I am profitable - the greater 'risk ratios' your strategy holds, the lower the win rate required to be profitable.
I have this with my own trading strategy. But some many people do not understand that you can be profitable with a win rate lower than 50%
Yea, it's pretty hard to comprehend it emotionally - but it's key to profitability. There's just too many factors affecting the markets, having a high R:R ratio just gives you a better odd at profiting.
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