I have found interesting making sense article http://forexop.com/strategy/stop-los.../#comment-2484
which has excel calculator.
I like the idea that he states that TP SL ratio is not only the amount of pips distance, but probability also which makes sense. He gave good example with lottery.
In the screen shot you can see that it shows me TP less than current price. Why?
You can see what imput I added in atached xlsx file.
Current price I entered is not really current, I am just experimenting as if it was current, what TP SL this would offer.
which has excel calculator.
I like the idea that he states that TP SL ratio is not only the amount of pips distance, but probability also which makes sense. He gave good example with lottery.
QuoteDislikedTake this simple example. Suppose there is a lottery costing $1 to enter. The prize is $1m. By the definition of the nave trader, this gives:
Risk: $1
Reward: $1m
Reward/Risk ratio: 1,000,000
By that definition, this would seem a fantastic game to play. However, suppose we know that two million people enter the lottery. This makes the odds of winning 1:2,000,000 (one in two million).
In the screen shot you can see that it shows me TP less than current price. Why?
You can see what imput I added in atached xlsx file.
Current price I entered is not really current, I am just experimenting as if it was current, what TP SL this would offer.
Attached File(s)
stop loss calculator v 4.4 with eur usd.xlsx
2.6 MB
|
229 downloads