"You cannot stay profitable in long run with risk reward ratio less than one. Regardless of win ratio!"
I would say that it is most likely completely the opposite.
Many strategies, especially those with a SL much larger than the TP have a high win rate with many small wins, but eventually the SL is hit and the big loss wipes out all those small wins.
I would say that it is most likely completely the opposite.
Many strategies, especially those with a SL much larger than the TP have a high win rate with many small wins, but eventually the SL is hit and the big loss wipes out all those small wins.
Exactly. Traders with high win rate mindset have a tendency to keep their position for long time and wipe their small wins.
Aren't you contradicting yourself?
"You cannot stay profitable in long run with risk reward ratio less than one. Regardless of win ratio!"
You are saying that you cannot stay profitable in long run with a smaller SL than TP. Regardless of win ratio!
Dear traders.
The common belief is risk reward ratio is not enough in evaluating profitability. You also need to know the win rate.
I have a theory for myself. I just want to know how you think of this.
"You cannot stay profitable in long run with risk reward ratio less than one. Regardless of win ratio!"
In other word: RR ratio is enough to evaluate performance in long term(and not short term).
This is coming from experience and studying real account analysis and others' traders performance.
What do you think?
I started with leverage trading and blown up my account many times, The strategy was fine, the only problem was not managing risk or using SL. I believe every novice trader may have done this once.
I learnt that its impossible to survive without a SL or hedging system, RR 1:1 works fine if win rate is higher otherwise 1:3 risk:reward minimum is required to be followed up
Finding a SL is complicated way because few trader suggests SL based on price action such as if a hammer candlestick pattern is made, it is advised to put SL just near low of Hammer with few pts of spacing
and it is most often hunted then this is called SL hunting
so finding a real SL is very complicated for a trader because noise exists somtime wicks make a trade invalid, Many also believes in closing of a candle otherwise they dont consider wick for a trade failure
it does not matter if account size is $10 or $100k it will be hunted if a single trade is placed without SL or Hedge, because market makers have advanced tools to track market depth or book depth, they know who is placing what order with what SL
After learning from this, even if i trade when i am not focused, i do not make human errors as SL is always passed along with entry.
but its not a success solution, I also lost my capital even after risk management but it was done in 3 months slowly in 50 traders, while without risk management i lost in 3 minutes.
I started with leverage trading and blown up my account many times, The strategy was fine, the only problem was not managing risk or using SL. I believe every novice trader may have done this once.
I learnt that its impossible to survive without a SL or hedging system, RR 1:1 works fine if win rate is higher otherwise 1:3 risk:reward minimum is required to be followed up
Finding a SL is complicated way because few trader suggests SL based on price action such as if a hammer candlestick pattern is made, it is advised to put SL just near low of Hammer with few pts of spacing
and it is most often hunted then this is called SL hunting
so finding a real SL is very complicated for a trader.
it does not matter if account size is $10 or $100k it will be hunted if a single trade is placed without SL or Hedge, because market makers have advanced tools to track market depth or book depth, they know who is placing what order with what SL
After learning from this, even if i trade when i am not focused, i do not make human errors as SL is always passed along with entry.
What I am trying to say is actually it is not important where you place stop. You get hunted every now and then anyway. The important thing is maintaining a good rr ratio.
yes there needs to be a strategy which follows up with risk reward, You cant just follow risk reward if strategy is not supporting this ratio. Maintaining RR will not work if you have not tested your strategy to follow that RR you are following up. Some of my scalping strategy follow up 2 risk : 0.75 reward and its win rate is high so it works too, while some have lower win rate and it required 0.5:5 minimum. It fails 5 times but all loss recover and profit is also made when it gets a successful tp hit
yes there needs to be a strategy which follows up with risk reward, You cant just follow risk reward if strategy is not supporting this ratio. Maintaining RR will not work if you have not tested your strategy to follow that RR you are following up. Some of my scalping strategy follow up 2 risk : 0.75 reward and its win rate is high so it works too, while some have lower win rate and it required 0.5:5 minimum. It fails 5 times but all loss recover and profit is also made when it gets a successful tp hit
maybe this can help you @ Yashar Seyyedin, for me the RR before closing trade it's .......
you can have a RR of 0,30 You can make money if your trades win 85% of the time,for me the RR is bull shit, because all peopel thinking and starting to calculate this value before closing the trade, the market is the king, when he decide to close your trade, after this time you can check your hand and calculate the RR 🤣
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Dear traders.
The common belief is reward risk ratio is not enough in evaluating profitability. You also need to know the win rate.
I have a theory for myself. I just want to know how you think of this.
"You cannot stay profitable in long run with reward risk ratio less than one. Regardless of win ratio!"
In other word: RR ratio is enough to evaluate performance in long term(and not short term).
This is coming from experience and studying real account analysis and others' traders performance.
What do you think?