StockFetcher Forums · General Discussion · Risk to reward ratio<< >>Post Follow-up
87 posts
msg #74956
Ignore cr0cop
6/2/2009 10:31:08 PM

when you guys jump in a trade what risk to reward ratio do you guys use.... i use a 1 to 4 risk to reward ratio

4,689 posts
msg #74982
Ignore Eman93
6/4/2009 1:27:55 AM

Only if you have a system that over time is proven or back tested on any market time frame to make money....... other than that you are just tradding take what you can when you can.

you would need to win 1 out of every 4 trades to break even... you bet 1 to make 4 so thats 25 wins out of 100 trades... you could very easly go 10 or 20 in a row with out winning....

622 posts
msg #74992
Ignore luc1grunt
6/4/2009 9:12:12 AM

what is your expectancy? Saying you shoot for 4:1 is one thing, getting it is another.

I won't take a trade if the probability is less than 50% and won't take a trade when risk is greater than reward. Seems obvious, but many fail to grasp and implement this. risk a buck to make a dime is a slow death. better off in vegas.

They are not around very long.


749 posts
msg #74995
Ignore miketranz
6/4/2009 11:10:19 AM

RR ratios are a fallacy with respect to the upside.You take what the market gives,if anything.The only thing you really have to worry about is your downsize risk.That's where most traders get into trouble.....

622 posts
msg #75004
Ignore luc1grunt
6/4/2009 3:39:44 PM

i don't think they are falacies (r/r). They can be determined for probability (s/r lines, conditions etc.) for viability.

Going long just under a major resistance area while severely oversold and no serious support for miles is lunacy....but it is done everyday :)

Risk determined from the logical placement of stops is a first setp. Determining the amount to risk from that point is easy.

Once determined, can the profit on the trade be expected or is it just a crap shoot? Is the target $.10 if the risk is $.40?

74 posts
msg #75113
Ignore richo
6/6/2009 6:17:28 AM


I think you meant entering long just under major resistance when very overbought


622 posts
msg #75115
Ignore luc1grunt
6/6/2009 6:36:01 AM

Good catch Richo....yes, that's what I meant. Sorry for the confusion.


StockFetcher Forums · General Discussion · Risk to reward ratio<< >>Post Follow-up

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