Say I have a strategy. I list all the information I need to track the data, distances, open, high/low price whatever I need to calculate the profitability of the trade.
Now I get to the point where I have the pips I risked, for the pips I gained, for example, 2.5 (which would be 2.5:1) I risked 10 pips, and I got 25 in return. Now just looking at the small table of say 9 trades I can easily determine what's the best take profit, and could put it to use.
Unfortunately, I will be grabbing alot more data before I put it to use, thus I'll need a simple way to calculate the best scenario. Best scenario being, highest gains. Win/loss ratio doesn't really matter, as an example all the 1's I lose, that 5 take profit I have pops up enough to cover all the losses. I'm sure most will understand what I'm saying, it's just hard to type it out. (Example risking 1% a trade) If 2:1 has a win loss of say 50% (5% gain), and then 3:1 has a win loss of 40%(6% gain), and a 10:1 happens 20% of the time (12% gain), then obviously in the end, the 10:1 TP makes the most.
Anyways, I was thinking of plotting all the returns on a bell curve, but that doesn't really give me the best scenario, just charts pretty much where the average is. I'm using excel btw. I might have to add up all the cell's with a 3:1 ratio, then subtract all the cells under 3:1, and then do that for 2:1, 4:1, 5:1 etc and determine in the end which is most profitable.
Suggestions would be helpful, I've been thinking too much
Now I get to the point where I have the pips I risked, for the pips I gained, for example, 2.5 (which would be 2.5:1) I risked 10 pips, and I got 25 in return. Now just looking at the small table of say 9 trades I can easily determine what's the best take profit, and could put it to use.
Unfortunately, I will be grabbing alot more data before I put it to use, thus I'll need a simple way to calculate the best scenario. Best scenario being, highest gains. Win/loss ratio doesn't really matter, as an example all the 1's I lose, that 5 take profit I have pops up enough to cover all the losses. I'm sure most will understand what I'm saying, it's just hard to type it out. (Example risking 1% a trade) If 2:1 has a win loss of say 50% (5% gain), and then 3:1 has a win loss of 40%(6% gain), and a 10:1 happens 20% of the time (12% gain), then obviously in the end, the 10:1 TP makes the most.
Anyways, I was thinking of plotting all the returns on a bell curve, but that doesn't really give me the best scenario, just charts pretty much where the average is. I'm using excel btw. I might have to add up all the cell's with a 3:1 ratio, then subtract all the cells under 3:1, and then do that for 2:1, 4:1, 5:1 etc and determine in the end which is most profitable.
Suggestions would be helpful, I've been thinking too much