Your indepth explanation elaborates clearly the need to take risk analysis seriously but also ensure a trader takes those set ups that are well thought out and executed.Many traders put way too much emphasis on the winrate and do not understand that a winrate does not tell you anything about the quality of a system or a trader.On the other hand, you can have a profitable system even with a winrate of 50, 40 or onl 30 if you are good at letting winners run and cutting losses short.
When you use the RRR in combination with other trading metrics (such as winrate), it quickly becomes one of the most powerful trading tools. ![]() On the other hand, setting your stop closer will increase premature stop runs and you will be kicked out of your trades too early. Your trading rules are there for a reason and a bad trade does not suddenly become acceptable by randomly hoping to achieve a larger reward:risk ratio. As long as your reward:risk ratio and your historical winrate match, your trading will provide a positive expectancy. Remember, with a winrate of 50, you just need a RRR greater than 1:1 to trade profitably. Hannah condensed font cssWith a 2:1 RRR you can potentially trader very profitable with a winrate of 50. Remember, with a winrate of 50, you need a RRR greater than 1:1. He can be wrong four out of five times and still be in great shape. How often have you found yourself flipping through timeframes of the same instruments time and time again without really knowing. Win Rate Percent Excel Professional Trader HaveSo you want to be a professional trader Have you made up your mind what exactly that entails, how your. The daily chart of the Nasdaq shows that the price is approaching a significant resistance cluster. ![]() Mean reversion trading is often referred to as counter-trend or reversal trading which all, more or less, describe the same. The Overbought and Oversold myth of using those concepts to trade reversals is probably one of the most widely misunderstood. The first is 1:1 and should the second reach 2:1 I move stop to entry and then my target becomes 3:1. I keep my risk small so I can stay in the game and try not to cut winners short. Halfway there and your posts really help me in correcting my methods. I hear people quote RiskReward all the time like that is enough and I have been shaking my head. I knew I needed to weight based on probability but my math skills kind of suck. The fact that this information took me three days of searching to find might be part of why so many people lose money trading options. All they see is riskreward and that is less (or possibly less) than half the issue.
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