thread: 1:1 Risk Reward Ratio - Why it just makes sense

I don't believe you understood that the maths in my very first article in this thread. If I started with a 1:4 RR I would lose.

I don't remember mentioning any particular ratio, just letting profitable trades operate when the opportunity arises and the market features profit. Personally my transactions are closed when the market, and my analysis of it, indie they should be closed rather than some arbitrary ratio number.

Scalping, though (potentially) extremely profitable, might be deducted from nearly all the broadly accepted standards of gambling and risk/reward/money direction, a lot of the time I discovered the numbers skewed way beyond some other generally accepted standard.

Personally my transactions are closed while the market, and my analysis of this, indie they ought to be closed instead of a random ratio number.

While I agree with this,
such a position is likely rare. Most people, let alone traders, need their thoughts to agree with each other.
To be able to make a cogent argument separately for the SL and for the TP, is a valuable skill in gambling.
Thus, many would turn into a artificial exit and/or entrance such as a pair R:R or alternative metric, so it doesn't conflict with but only turns on/off the failed transaction.

I got this thought from a favorite thinking typology, http://www.google.com/webhp?rlz=1C1_...biw=682bih=448, that informs similarly about http://www.typologycentral.com/forum...ison-bron.html.

While I agree with this,
such a situation is probably uncommon. Most people, let alone traders, need their ideas to agree with each other.
To be able to make a cogent debate separately for the SL and for the TP, is a valuable skill in gambling.

I think that it becomes easier if one looks at it as merely'buying','selling', and'exposure' instead of SL and TP, it is more applicable to not mention helps relieve some of those plogical challenges. Having said that, we need to try and keep viability in your mind, it is a juggling act!

I got this idea from a favorite thinking typology, http://www.google.com/webhp?rlz=1C1_...biw=682bih=448, which tells similarly about http://www.typologycentral.com/forum...ison-bron.html....

Thank you for the links, I have not accepted the questionnaire yet but it'll be interesting to view the results!

- With respect, you've got your own manner of risk reward direction and that is great that it work for you. Nonetheless, it is not. You're currently using a strategy that gives a high reward to the risk however likely a low win rate, with trades that are less regular, and the result is positive for you. Some use a technique that gives a 50/50 risk to reward ratio using a higher than 50% win rate and trades. If they risk 0.5percent of their account to gain 0.5% plus they achieve 6-7 wins out of 10 and take 10-20 trades a day, that leaves a profit of 0.5-2% account expansion every day.

- With respect, you have your own manner of risk reward direction and that's great that it functions for you. But it is not the only style that works. You're using a method that gives a high reward to the risk however success rate, with regular trades, and the result is net positive for you. Some use a technique that gives a 50/50 risk to reward ratio with a higher than 50% win rate and trades. If they risk 0.5% of their account to gain 0.5% and they reach 6-7 wins out of 10 and take 10-20 trades a day, that...

One thing you need to consider is intervals where your win drops... compare the R/R's about the risk of destroy table.... See how simple it can all go wrong with such tight margins

http://2ndskiesforex.com/egies-for-f...u-should-know/

It is figures that suggest over time, given that a Trader's outcomes and the probability of losing streaks which odds favor a 3:1 reward to risk model. It doesn't require much in terms of advantage to acquire this type of setup... just a base of simple technicals and proper time frame analysis.

Employing a 1:1 ratio, unless scaling first aim and then moving to Breakeven is the only time 1:1 should be used. How accurate is the trading? If you are only earning 50% accurate trades... you won't endure the normal give and take this company requires in equity. To become more profitable with a 1:1 that you need to have more or 70 percent precision to have any change of longevity.

Consider nevertheless, the 3:1 ratio for a base model... and greater is even greater. You would only need to be accurate about 33 percent of the opportunity to Breakeven... and 50% accurate is profitable... modestly, but nevertheless profitable. As time passes and your advancement improves, the ratio of reward to risk is now a dynamic duo with greater precision in your trading... the end result... fat wallets and sore facial muscles.

GLGT

One thing you need to consider is periods where your win drops... compare the R/R's on the risk of ruin table.... See how easy it could all go wrong with these tight margins

http://2ndskiesforex.com/egies-for-f...u-should-know/

Thank you for the connection. Towards the begining of this guide is that:

You can actually have a 3:1 Reward-Risk ratio and also lose all of the money on your account. You can also have a 1:1 Reward-Risk ratio and earn money day in day out.

This is what I have been wanting to say but apparently it's lost on some people and many are stuck at the overall masses herding mentallity that only RRs of 1:2 or greater are profitable. I would love for people to realise with it comes as you adjust the RR ratio and adjustment of win/loss ratio. And also that reduced timeframes are a completely different ball game. You can not apply the same old price action trading style into the M1 chart.

I am talking about a scalping strategy that seeks high likelihood short term changes for 10 pips of profit with a 1:1 RR. I think many here that are now shooting down my methodolgy are currently thinking in terms of the 4H timeframes and old fashioned price action methods.

One thing you need to think about is periods where your win drops... compare the R/R's about the risk of ruin table.... See how simple it could all go wrong with such tight margins

http://2ndskiesforex.com/egies-for-f...u-should-know/

Okay here is the table.

According to it, with a 50% win rate at 1:1 RR there's a 100% risk of ruin. Now. . .if it's a RR trading method that means each win equals 1 reduction costs factored in. Therefore it would be method not one which needed a 100% likelihood of reduction that is complete. If one can moderate in the 60-70% win rate at 1:1 they can, since the report starts of by saying, make cash day in day out. I really don't know why people aren't grasping this.

Okay here is your table.

Based on it, using a 50% win rate at 1:1 RR there is a 100% risk of ruin. Now. . .if it is a RR trading method that means every win equals exactly 1 loss prices payable in. Therefore it would really be a break even method none which had a 100% likelihood of complete loss. If one can moderate in the 60-70% win rate at 1:1 they could, as the article starts of saying, make money daily out. I don't know why people aren't grasping this.

I know completely and understand what you're saying.

I'm not against a positive r:r at all, I am just saying as you have stated that there is more than 1 way to make money and a 1:1 is surely a decent way if you understand what you are doing.

I think everyone just has their own opinions and a few are less prepared to find the other side to their debate than others.

Incidentally what happened to your thread in which you're trading reside? There seemed like no better way to show the concept than in there...

What say we start a thread at the interactive trading based on this thread here... are welcome to join and we could prove that 1:1 could be profitable.

Trading my system you'd have had 7 trades now 5 wins two losses... and yes you might very well have encounter any trades to get a little more tan 1:1 although not much... but carrying many bites of the cherry now would have paid you more that is all I think Roofx is trying emphasize.

- With respect, you've got your own style of risk reward management and that is good that it functions for you. But it is not the style which works.

Roofx, I believe that you may be missing a lot of articles, or perhaps misunderstanding them?